It is true...many thought we would never get back to this place - A BUYER'S MARKET! But, here we are right in the middle of it. It needed to happen, we needed a correction from our overblown, overpriced real estate market in Southern California.
But there seems to be some confusion as to what a "Buyer's Market" truly is. Most transactions are now giving the buyer a credit toward their closing costs which is a huge help for buyers to leverage their money. It is also true that sellers are usually not receiving full price for their listings, properties sit on the market for longer than they did a year or two ago and sellers have to be willing to negotiate. (Sidenote: Two of my recent listings sold for at listing price or just below!)
The problem, or shall I say "misunderstanding," lies with both buyers and sellers in our changing market. Sellers still believe that their home value should be the overinflated prices of the hot real estate market. The reality is that prices have declined.
The misunderstanding that buyers have is that they now believe that they should be able to STEAL the property they have been waiting to buy. We all love a bargain - there is no harm in that! But the reality is that most listing prices have already been reduced to reflect today's market. While there is room to negotiate, sellers are not going to GIVE their properties away.
If you really want to low-ball a listing price, your chances of success are with foreclosures. I'll blog about the foreclosure market another day. Short sales are rampant and you can get good deals there as well, but BE PREPARED...if you don't have the patience of Job the short sale market may not be what you are looking for. An agent from my office has been awaiting a bank's decision on a short sale for over three months!!!
One analogy I heard in a real estate seminar recently was perfect for today's market. The speaker was referring to sellers wanting to hold onto last year's pricing. If they owned stock in Disney and the market showed that the stock was worth $48 in today's market and the seller said no, it was worth $148 when I bought it and that's what I want...guess what?!? They can't get $148 for it today...same goes when pricing a home to sell. You can only get what it's worth in the current market. You can want your price until the sun goes down again and again and again. An overpriced home will sit on the market indefinitely.
Let's look at the flipside of this. Just because your budget dictates that you can only pay $275,000 for a new home doesn't mean that you can make an offer on a home worth $550,000 and get it for your price. It just doesn't work that way no matter how much you want it to.
The bottom line is that all of us involved in a transaction need to make each transaction a win-win situation. We all need to be reasonable whether we are pricing a property to sell or making an offer to buy! This is where your real estate professional comes in...make sure the Realtor you are working with will tell you like it is. You don't want someone who will promise you everything and deliver you nothing. You also want someone who will be optimistic and will refer you to a good lender (or give you a choice of lenders they recommend) and you want someone who truly cares about your situation and not just making their sales quota or another buck!
Thanks for stopping by...there'll be more useful info soon.