Many of you will remember the real estate frenzy that marked the tail end of the last decade and the beginning of the 2020s. It sure was a wild ride. Multiple offers everywhere. A listing cycle that lasted a week. And a purchase price determination based less on the data and more on ‘what price are you willing to lose this one at?’
We’re in a different world now, and yet some folks in the marketplace still don’t see it and as a result they’re making mistakes that are costing them.
Practically, what do these mistakes look like? In the past few weeks we’ve seen:
– Sellers countering only at list price to reasonable offers.
– Buyers failing to complete on time because they foolishly purchased before selling.
– Sellers snoozing on solid offers thinking the buyers won’t move on another property.
– Buyers mistaking a minor pullback for a bloodbath by submitting offensively low offers.
The gap between buyers and sellers expectations has never been larger, leading to frustration across the board.
So, how can those involved in a real estate transaction avoid these mistakes?
1. Prioritize Honesty
We always ask our clients in the onboarding process what they’re looking for from us and almost always we hear back ‘honesty’ and ‘trustworthiness’. Those are priorities for almost everyone heading into a real estate transaction.
Sadly, there are a lot of Realtors out there right now that are simply telling clients what they want to hear, desperately hoping they’ll eventually be able to grind them down.
I’ll never forget advice I received at a former brokerage where I was told, ‘you have to get the listing to get the price reduction.’ What a horrible way to conduct business and to treat people!
We’re seeing it everywhere though, many of the signs you see in your neighbourhoods for months and months on end are due to the agent not being honest with their clients.
2. Trust Your Professionals
Of course not all of those signs are still there because the agents weren’t honest, sometimes they’re just ignored.
We recognize it’s a very tough mental transition for sellers to make after nearly a decade of sellers’ markets but pretending we’re still in the early 2020s really isn’t helping anyone.
Ultimately a list price is always the seller’s decision to make, we’re not here to dictate, merely to advise. As a result, we always provide a range with prospective sellers. We’re happy to start out at the top of the range, but it does tend to result in slower results, which generally hurts sellers in a downtrending market.
3. Order Your Transaction Correctly
For the first time in nearly a decade in the industry we had a first this week, a buyer was unable to complete on one of our listings, even after months to sell their home.
Years ago I developed ‘The Flexibility Scale’ to help our clients determine the order of their transaction, most recently republished at the beginning of this year. It really did used to be a tough decision for many, but today I’d say that for 95%+ of those considering a real estate transaction in today’s market selling first is the way to go.
4. Remember It’s Human Beings On The Other Side
Ultimately, people do make mistakes and misjudge the current market dynamics. This can be frustrating for those on the other side of the transaction.
In these instances it can be easy to be overwhelmed by the emotions of it, we’re seeing our clients that are most magnanimous have the best results.
Lots of the stories in the marketplace out there are very sad ones these days, I’ve never seen so many divorce sales, bankruptcies, collapsed businesses, and job layoffs.
That means that negotiations can take substantially longer than they used to, days rather than hours.
A Little Hope
Few of these mistakes can’t be corrected, but ideally they should be avoided for the client’s own sake. Even if they’re not though, there’s almost always a path forward, it might just take a little more patience and a little more time.
Even if the clients and the professionals do everything perfectly this market can still take patience, but eventually the results do come, sometimes out of nowhere.
The one thing Realtors can’t do is magically make the buyers appear, sometimes that just takes time, but it does come.
Real estate transactions are still very navigable and we’ve had some incredible results in recent weeks with our clients.
If you’d like to know how the above could impact your scenario, as always, don’t hesitate to reach out!