Up Market for buyers

Comment by Diane Cohn on April 1, 2008 at 6:45pm

Victor, in Reno-Sparks I would say it's down for sellers, up for buyers, and maybe going even better for buyers as the year unfolds due to the high number of foreclosures in the pipeline. Tahoe is probably a different story.

You bring up a very interesting question about the health of a market is judged from the seller's point of view... not sure why that's the case and would love to hear other's input on this. Buyers doing nutty things to get into the house of their dreams in a competitive market seems to put them at a disadvantage indeed. But now the tables have turned, and I do think it's a good time to be out looking.

Comment by Rika Dotson on April 1, 2008 at 6:58pm

It probably is a great time to buy, but buyers and their agents are having a tough time securing financing. (High end luxury all cash deals being the exception since no financing is needed.) Prices are low, but the gap between the asking price and what buyers appear willing to pay is still too wide. I have seen several deals in this market fall completely apart because of unrealistic expectations -- from the buyers. At the beginning of the swing from a seller market to one that favors buyers, agents were challenged to find the best way to convince their sellers that their home needed to be priced right, that the days of bidding wars and multiple offers are behind us. Still plenty of agents have ended up taking listings that are overpriced and then revisiting the pricing issue when the house didn't sell. Now it's time to find a way to educate potential buyers. Many think they can just come in with any offer and that the seller will negotiate. Recently I had a agent come back from a client meeting where the buyers first offer was a full $1 million below asking price on a home that had already seen a price reduction. The whole meeting was a waste of time. They say it never hurts to ask but real estate is a very personal business and the sellers were insulted by the offer. Who knows what might have happened if the buyers and their agents had gone in with a mind set to negotiate and work with the sellers? Educating real estate agents on how to work with their buyer clients in this market, especially at the luxury level is a great way to really put the power in their buyers' hands.

Comment by ChaseNation on April 1, 2008 at 10:09pm

Rika, I agree. Random lowball offers are a waste of everyone's time. However, a low offer justified by comps, data, and current market conditions are a different matter.

If I can justify a lower offering price I will. But the key is education. An intelligent offer supported by real time data will always illicit some some kind of a response from the seller... and that is the whole point when representing a buyer in a down market. Go as low as you can with diplomacy, data and sensitivity to the seller to encourage a response.

As long as the two sides communicate, there's a chance of reaching a compromise in very difficult conditions. Unfortunately the general public has no idea what goes on behind the scenes to bring a deal together... but two professional agents on each side can seriously make it happen.

Comment by Rika Dotson on April 1, 2008 at 10:39pm

Exactly. And you are right, Real time data is key to making this market work for your buyer and seller.

Comment by Michael Robinson on April 2, 2008 at 12:55pm

Diane, I think the health of the market has to be judged from the sellers point of view because that is when prices are going up. However, I don't think it is healthy when the market becomes such an extreme sellers market that a buyer has virtually no choices and has to go through a bidding war to buy a home. This is what we experienced in 2004 and part of 2005.

In 2008, nobody wants to buy a home and find out it is worth less than they paid for it two months later. I think buyer fear of this is what has been holding the market back recently. However, it seems that there have been such huge price reductions in all price bands in Reno recently that it must be a good time to buy. Many builders have left the area and the ones remaining don't even have sales offices open in many cases. Last months sales numbers indicated a big drop in new home sales while resales increased. I think this is a good indicator that we are at or near the bottom of the market.

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