The current Real Estate market is very challenging. Perhaps it wouldn't be if everyone would just relax a little more and not act so crazy. I'm going to pick on four groups in this article. There may be more but we'll stop at four for the sake of time.
Sellers are crazy!
Believe it or not there are still some sellers that think we are living in 2005. These sellers are pricing their homes above the market and expecting buyers to jump up and pay the price because the seller "needs" the money. Some sellers are "testing" the market. These sellers have no specific need to sell and are willing to "see what happens". If the home doesn't sell at their price, they are willing to continue living in it. There may be a sign on the lawn, but the home really isn't for sale. This is crazy! When we were in a sellers market there were still homes that did not sell because the price was too high. However, a hot market could make up for small overpricing. As time would go by, the market would catch up to the sellers higher price. Clearly this is not the type of market that we are in today. Homes that are priced right and marketed well are selling!
Buyers are crazy!
Looking for a good deal isn't crazy. Trying to buy a home that has a clear fair market value of $500,000 for $150,000 is. Buyer expectations are crazy. Buyers are looking for "the perfect house" and they want it cheap. When buyers find a home that is a good opportunity, they will usually back away if there are "other offers". When a home is a "good deal" it only makes sense that others will also be interested. Who wants to buy the house that has been sitting on the market forever, looks terrible from the street, needs everything inside and is priced well above the market? Answer: nobody! There are great opportunities in this market. Don't be afraid of others. Know what you feel a home is worth, then don't spend a penny more. Just make sure that you consult with somebody who knows what fair market value is. Most likely a Realtor can assist you.
Banks are crazy!
In some areas distressed properties (short sales, bank owned properties) make up almost 50% of all the area sales. When there is this much stress on pricing, everyone is affected. Banks have a ton of non performing loans on their books. Some people are behind on their mortgage with no prospect of catching up. The smart seller will attempt a short sale. Banks are crazy when they are presented with a legitimate short sale offer and then take months and months to respond. Everyone in the transaction gets frustrated and if there is a crazy buyer involved, the buyer usually gets tired of waiting and backs out. Bank inventory of homes are increasing. Unfortunately people are getting foreclosed on each and every day. It costs the banks more money to foreclose on a home, evict the owners, clean the place out, pay the taxes, etc. than it would for a short sale. Banks should take what money they can from a short sale. Taking the property back to sell later on is crazy!
Realtors are crazy!
Some Realtors have forgotten what their role is. Somehow they feel that they own the property or that it is their decision as to how much the seller should accept. Last time I checked Realtors were not given ownership of a property that they marketed for sale. Realtors typically don't have ownership of the properties they market. The Realtors role is one of a facilitator. Here is the crazy part. Realtors are held to a higher standard. The Realtor code of ethics states in
Standard of Practice 1-3
REALTORS®, in attempting to secure a listing, shall not deliberately mislead the owner as to market value.
This works in both directions.
Underpricing: It would be a clear violation to tell a seller that their home is worth well below the market value, then have a Realtor purchase it from them and turn around and sell it immediately (without doing any work to the home) for more money.
Overpricing: Some homes are listed well above their market value. In the industry we call this "buying a listing". There are agents who will list any home at any price. This is a much grayer area. Can't recall an agent being brought up on charges for grossly overpricing a home. Either way the Realtor is performing a crazy disservice to the client.
Get Educated. Get Empowered.
For more information on this or any other topic, call Sal Poliandro, Broker Associate, Realtor, Marketing Advisor,
Short Sale Specialist and CDPE, Certified Distressed Property Expert
ePRO, SRES at 201-957-7650, visit our website: www.BCHomeTeam.com
Follow me on Twitter: @salanddawn
Sal can be reached by snail mail at RE/MAX Properties 82 East Allendale Road Suite 4B Saddle River, NJ 07458