All right now, get those dirty thoughts out of your heads. What we’re referring to here is the power that buyers have over the market right now. Let’s take a look at some interesting phenomena we’re seeing out there :
1) In any given market you’ve got a batch of sellers. Which ones are the truly motivated ones? Most of the time it is tough to tell. Present market conditions have created a grand exposé. The curtains are now pulled back and buyers have more insight than ever into who the eager sellers are.
2) Sellers generally have a bottom price in mind when they list their homes. They usually list their homes above that bottom to build in a little cushion to negotiate. That bottom figure is top secret. They play their cards very close to their vests and you usually never know what bottom is for them until you begin negotiating. This comes as no surprise. However, what we’re seeing play out in the marketplace lately is sellers are feeling increased pressure from falling prices, rising inventory, and the lowest consumer confidence levels on record. This is causing more sellers (particularly the smart ones) to cut to the chase and list their homes at levels that will attract attention.
3) The typical seller is currently challenged by chasing a moving target. The market has changed so dramatically over such a quick period that finding the true market value a home ain’t all cotton candy and ferris wheels. It’s become a major headache for sellers, who have desperately been trying to find that number with price drop after price drop, causing even more apprehension on the part of buyers. This leads to a vicious cycle.
4) Buyers are either sitting on the sidelines, waiting for confidence to build, or are bidding very cautiously. We have seen some homes selling at and above asking, with multiple offers, but nothing on the scale of years’ past. Generally speaking, buyers seem to be in complete control right now.
Why are these points important? Two reasons. First, if you’re a buyer, take full advantage of seeing the other players’ cards right now. If you’re a seller, particularly a motivated one, be realistic about your asking price and know the psychology of the typical buyer before you launch your home into the marketplace. If you’re interviewing listing agents, don’t fall for the one with the highest list price. You’ll want the agent that tells you how it is, despite how tough that pill may be to swallow.
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