The Westchester real estate market is now truly a buyer’s market. In most communities, the number of westchester ny homes for sale is in excess of six months inventory. This is not universal throughout the county. But for the most part, the county is in a buyer’s market. A few days ago, I wrote a blog about seller’s stuck on unrealistic prices (Dear Seller, About that number in your head…) But this is one of those markets where unrealistic expectations are not limited to one side of the transaction. Fueled in part by media reports filled with sturm und drang (storm and stress) many buyers have confused a buyer’s market with a fire sale.
Unfortunately, unrealistic expectations can set buyers up for unnecessary disappointment and frustration. There are several flavors of unrealistic buyers out there.
The “I want to steal a house” investor:
This buyer is determined to find a home for pennies on the dollar. They comb through listing after listing and call agent after agent to show them home after home that looks as though it is the bargain of the century. The trouble is that once they see the home, they realize that this is beyond the simple fixer-upper. A new coat of paint is not going to do the trick. These homes don’t just need TLC – they need to be gutted.
This type of buyer needs to realize that there is no free ride here. Many of them have been watching too many late-night TV shows that claim that banks want to get rid of these properties at “any price.” After the way the banks have behaved over the past year – does anyone seriously think they are going to get the better end of any deal involving a bank? Banks have shown themselves to be more than capable of looking after their own interests.
The “I’ve got champaign taste and a beer budget -but I’m not settling” buyer:
This buyer can appear in any market. Since affordability has improved, it might seem counterintuitive to observe an increase in this type of buyer right now. Yet, that’s what I’m seeing. They want far more than they can ever possibly afford and the buyer’s market media hype is giving them tacit permission to push for the impossible. The sad thing is that this buyer is not looking at the increased affordability of the past year as the gift that it is – instead they are on a quest for even more.
This type of buyer has two choices: bite the bullet and buy what they can truly afford or roll the dice and hope that affordability increases still further. The latter has true risks in this market. Although prices may decline further, affordability is probably not going to increase because interest rates are almost certainly headed northward. This may well more than offset any further price decreases. For affordability to increase the buyer has to look to their own finances not the marketplace in order to afford “more.”
The buyer who will only put in offers 10-20% below asking price no matter what the comps say:
This type of buyer is of the mindset that “if you don’t ask, you don’t get.” They want to “test” the seller with a lowball in the hopes that the seller is desperate enough or ignorant enough of the comparable solds to accept. As I said in my previous blog about sellers: asking isn’t getting.
Not only does this rarely work, but it can really offend the seller to the point where the buyer could lose the sale. Low-balling is not a good way to win friends – or negotiate a sale. Offers should be based on the comparable sales – NOT the asking price. Many seller’s have already priced their homes realistically. A realistically priced home is more likely to be having multiple offers – so low-balling is a bad idea.
At the end of the day, buyers need to take a realistic look at the comparable sales. Those numbers are not lying and placing realistic offers in that “sweet spot” where they are consistent with recent sales – leads to success in the long haul.
In the end, the sale and purchase of a home should be a win-win for all concerned. It’s not about “beating the market” or “getting the better end of the deal.” It’s about negotiating a transaction that works for all parties.
© 2010 Ruthmarie G. Hicks – http://thewestchesterview.com. All rights reserved.
Yesterday I showed a foreclosure. Until fairly recently, Westchester hasn’t witnessed much in the way of “underwater” home ownership. We’ve always had our share of foreclosures, but they were far from commonplace. The house was a mess. The walls contained broken dreams of home ownership and you have to wonder about the people who lived there.
There have been a lot of blogs written lately about who is to “blame” for the housing bubble and its disastrous aftermath. Some bloggers blame lenders, some blame agents, brokers, NAR, the Fed, home owners…the list goes on and on.
But one common thread I find very discouraging are blogs which lay blame on the homeowner who was underwater. They should have KNOWN better. They were GREEDY. They were IRRESPONSIBLE, they were this, they were that…
In truth, the housing debacle is as much a result of the decimation of the middle class as it is about a housing bubble itself. Families have found the ground shifting under them faster than they could ever have imagined. Many homeowners have found themselves into the horns of a dilemma. This is the story of my generation. As a forty-something I’ve felt the sands shifting under my feet ever faster. I have found myself scrambling to earn those ever elusive extra dollars that will allow me to keep my own home – even as I help my clients sell theirs.
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You know that your real estate market is expereincing a shake-up when an article about it in Inman News. The post was actually a reposting of an original article written by “The Real Deal” by Amy Tennery called Westchester real estate shake-up: Brokerage world sees shuffling of agents as firms shutter and consolidate during downturn.
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Back in the bull market days of 2005-2006 the notion of needing to “stage” your home for a faster sale was nearly laughable. But home sales in the Westchester market are not what they once were. As most seller’s are painfully aware – this is not 2006. There is ample inventory on the market, prices are down and buyers are increasingly picky. Things once deemed insignificant now become major stumbling blocks to a successful sale.
Increasingly, listing agents, myself included, are encouraging sellers to stage their homes prior to putting them on the market. That includes, but is not limited to painting, pointing up and arranging furniture in a way that maximizes the potential of the space and creates a neutral atmosphere. We ask that seller’s depersonalize the space so that buyers can “mentally move in.”
Although I am not one to spend a homeowners money needlessly, there are times when I feel staging is essential. Staging is most beneficial in the following cases:
An Empty Home:
When the sellers have moved out – they tend to leave an empty shell of a house that used to be a home. That house can tend to lack personality and be all too forgettable to a prospective buyer. Right now there is an excess of inventory that is completely unfurnished and after a while they can all start to look the same to buyers. If a house is in danger of becoming that forgettable – it needs staging in order to stand out in the eyes of buyers.
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It is very interesting that just as consumers are demanding ever more hyper-local content and knowledge from agents that we are also seeing another distinct trend in the opposite direction: the tendency to list and sell to larger and larger geographic areas.
The contrast between old-school hyper-local agents and the newer nomad agnet was driven home to me while I was working with two listing agents who still work exclusively in small niche markets. I was at a closing with one of them and she implied that since I had the entire city of White Plains to cover, why didn’t I simply refer out the client who finally bought in Scarsdale?
Can a real estate agent be too local?
I knew that the attitude about staying hyper-local is alive and well though it appears to be a staple of old-school real estate. Still, I was more than a tad surprised. Scarsdale is not the moon. It is the town directly adjacent to the west side of White Plains and about a whopping six miles from my front door to the center of the village. If we followed this line of thinking to its most extreme would mean that a buyer potentially moving from New York City to Westchester NY would have to have as many as five or six agents to explore all the possibilities open to them that were within about 30 minute commute. For the consumer this seems most unwieldy if not highly impractical. Could you imagine the mountain of agents all crawling over each other for the buyer’s attention? What a mess. Not to mention a monster of coordination.
From the agent’s perspective, there could also be a danger to being too local. What if something happens to that small segment of the market you represent? If your geography/price range are razor thin – you are setting yourself up for trouble. This was clearly seen this year when agents who specialized in small high-end markets got creamed because jumbo loan issues bit them in the backside. Another listing agent I encountered was used to selling about 10 major properties a year – but this year had only managed a single sale.
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