This is a tough market for home buyers. If you aren’t sufficiently motivated, you may write offers, but you won’t be buying a house.
I am a member of several online groups of Realtors and other real estate professionals who share ideas, give feedback, marketing, challenges, safety or tech tips, and more. Sometimes these groups are support for weary real estate agents.
Just now I read one agent in the deep south complain that her buyer won’t pay more than list price “on principle”, despite what the comparable sales indicate the value to be, despite the market conditions, 20 offers on a house, etc. She cannot get that buyer’s offer accepted because the buyer is staunch on offering exactly list price in every instance, and it’s just too low to be viable.
The real estate sales person has explained the market, the competition, the sale to list price ratio, but the buyer does not care about the data. The buyer only wants to pay list price, even if the house is under priced.
Guess what the 200+ real estate professionals advised her to do? If you guessed “fire the buyer“, you’re right. And I agree. She is not able to help him to buy a house. She is spinning her wheels. (And while doing so, she’s unable to help buyers who will buy, or to find new business so she doesn’t go broke working on something hopeless. As a business person, she either needs to help the buyer to write viable offers or she needs to let him know that she cannot assist him further. She’s not doing him or herself any favors to continue working with him under those circumstances.)
Is your Realtor more motivated than you are?
Realtors sometimes have to remind themselves that it is fruitless unless the buyers is as motivated as the agent to get the house. Both have to pull together (yes, it matters a lot if you have a lazy agent who isn’t motivated to put a complete package together and make the best possible impression). “Your buyer needs to be as motivated as you are”, goes the saying.
If you are a buyer, what’s your motivation for buying a home? How badly do you want it? This is not a balanced market, it is a deep seller’s market. It’s not for the faint of heart buyers. It’s not for buyers who expect to get a reasonable price. I wish it were, but across the nation it’s like this right now: multiple offers, overbids, unreasonably high prices that often are not supported by recently closed sales.
Many buyers have to write several offers before they land a home. Usually on the first offer or two, the bid may come with a low price and contingencies. After repeated attempts, and gettig feedback on the offers that do succeed, eventually the price rises and contingencies are lessened (or dropped – most homes are selling in Silicon Valley with no contingencies right now). They get closer when serious and not just wishful.
But there is a danger in taking your time: appreciation.
If you started writing offers 12 months ago, it has cost you 15-20% with single family homes in Santa Clara County. You could be priced out of the market entirely.
As for me, I know it can be a process to get up to speed with the market before a buyer may be ready to do what it takes to have the winning bid to buy. It may take a few offers, and most of the time, they get closer and closer to being #1, and that is encouraging. But it shouldn’t take a ton of offers. If the bids are not even close, we need to change up the strategy so that the buyer is in position for success.
Once in awhile I will have a new buyer consultation and that person will say something like “I may have to write 100 offers before I get a house”. That’s not someone I want to take on. That person isn’t motivated enough to actually buy a house.
Side note: these comments are not about any of my current buyers. All of them are trying to write reasonable offers based on recent solds. All of them are motivated.
Related Reading for motivated buyers:
Why looking at the comps may lead you astray in determining market value today (this is a really important topic that many buyers fail to understand)
Deciding what to look for in a Silicon Valley home (article on my popehandy.com site)