Places You Don’t Want to Be in Real Estate

There are certain paces you don’t want to be as Buyers, and some for Sellers as well.

As a Buyer, you don’t want to chase the market up in a rising market. I have represented Buyers who insisted that they needed a home but continually offered just enough under the rising market to lose home after home.

Most people get into a market where they both have a home for sale and a home they want to buy. The WORST position for them is to get into a position where they either own no homes – having sold and closed theirs without having a place to put their family and furniture – OR they own TWO HOMES, having closed their buy without having a bite on their home. Both of these positions are untenable unless you have major liquid assets.

Then as a Seller, the worst position is to chase the market down. I have some very good friends/clients who really follow the real estate market closely but got caught in their own emotionalism, and did just this. They were always $10,000 too high in their pricing even to elicit an offer, and lowering their selling price just behind the market for more than a year – instead of getting ahead of the market initially as was recommended. They didn’t want to “lose” $20,000 in their initial price, and instead spent more than a year and lost more than $100,000 as they lagged the market downward.

When I see buyers lose house after house because they lag a market, I just smile because it teaches them a lesson they can (eventually) apply to the next offer – but being too high for a seller is a vastly different position. They usually don’t get offers from which they can learn for the next transaction – they get no or few offers, and so the feed-back loop is not efficient.

In this market, timing is everything and that is why I recommend getting an outside Appraisal and pricing the home UNDER the market. Buyers are looking for bargains, and being a bargain is binary – you either are or you are not – and Buyers have usually been looking for sufficiently long and have sufficient experience to know what a bargain looks like.