There is a strange phenomenon occurring this fall with many of my buyer clients… we are the first in to offer on a place the first week it hits the market. The problem is, sellers will not give up the goods, thinking that there will a flood of offers for their “greatest condo ever”.
The basic scenario goes like this:
My clients and I look at the best properties available over a month’s time. Suddenly, a new listing comes on that really fits the bill for this PARTICULAR buyer… we know this because we’ve seen everything else, really determined what is important, and also know how the market is shaking out by this time in the year.
The property is probably 30K to 50K above what I think it will really sell at. However, we know what we want and we’re willing to write the offer anyway (knowing all the while it stinks being the first in on over priced listings). So we offer on the place accordingly.
The seller comes down, we come up… we start talking about financing, closing date, earnest money and how we are going to make this work…
But we get stuck 10K to 15K apart. Here’s why:
The sellers have not found their dream home yet at this point. And they won’t accept an offer (unless it’s very close to their asking price) until they find the elusive dream home (in which they’ll turn around lowball that seller). So, even though I have a qualified buyer client ready and willing pay up with the seller’s making good money, the seller passes…
This is a mistake. There is no guarantee that more time on the market will mean more offers at higher dollar amounts. There is also a boat load of time and stress the sellers could have saved themselves by taking an early offer. They don’t realize the psychological effect that market time and price reductions have on potential buyers as well. There is more going on here than money…and it’s called TIMING.
A hard fact is that even if the seller lowers the asking price later to the same as our actual offer, the timing may be off and no offers come. This happens all the time. When the seller finds their next home and is then ready to deal, the buyers are suddenly not around. Boo hoo.
In these cases I work with my buyer client’s strengths and weaknesses to formulate a strategy. There are many directions to go. One might think, “If it’s over priced, wait until they lower it”. But by that time, someone else could sweep it up as the greater market gets wind of the lower price. The key is to dance the dance and make the case to get the deal done. And this takes skill.