When markets move in a positive direction, the first ones you'll hear it from are sure to be real estate agents. With all of our updates and musings about how the recovery is going to impact the housing economy this year, you're guaranteed to be kept abreast with all the need-to-knows. We usually advice clients when there are shifts in buyer's or seller's behaviors - particularly when open houses are busier, when sales come in quicker, or even when we have multiple offers on our hottest listings. This, in the hope that by the time the news finally hits the mainstream media, you're comfortably sitting idly by for your property to start earning, leaving everyone else who start to feel the pull to get back in the market miles behind you.
That's what we're seeing in Boston right now, and the news is that this is also the case in many other parts of the country. With all signs tilting toward a sellers' market for the first time in years, it's helpful for buyers to understand today's seller. No two sellers are alike, of course. But there's a certain mindset that many sellers these days share, and it's a grateful one for many. Understanding that mindset can help you buyers more successfully and easily navigate through the process of purchasing a home, whether for investment or otherwise. The same holds true for sellers; they should be mindful of what buyers have in mind when they start their real estate hunt.
Many homeowners are in a negative equity position
According to a recently-release equity report from Zillow, 28 percent of homeowners with a mortgage today are underwater. Many sellers have been hoping and wishing for prices to increase just a little bit. Some have outgrown their current home, are forced into an hour-long commute (or longer) each day, or simply want to move to a new town or area. But due to their property's negative equity, they've been stuck. The emergence of a sellers' market provides them with a glimmer of hope. They just may be grateful for any offer that will allow them to get out at last.
Most often, sellers equal buyers
Often, sellers feel the same amount of stress or excitement that buyers feel because they're somewhere in the buying process, too. Though some sellers will become renters after their sale is complete, many will get back in the homeowner game soon after the sale goes through, sometimes immediately. Sellers, as would-be buyers, want to capitalize on low interest rates and home values. Getting the home sold quickly and at today's value may be all a seller needs to make a purchase. Though it may be a "sellers' market," these sellers usually aren't greedy. They feel the buyer's pain and likely want to get out cleanly and quickly so that they, too, can buy.
Relieved yet cautious
Even the sellers who are above water or own their homes outright are well aware of what's happened in the real estate market over the past five years. They've watched their friends and neighbors lose everything on real estate, forced to do short sales, or even have their homes foreclosed. They welcome the news that the market is changing, and in their favor, at last. They're more hopeful than they were even six months ago. Generally speaking, however, sellers who aren't stuck in their homes (because of depressed home values or other reasons) are still feeling conservative and cautious. They're more likely to stick to the offer at hand, than to risk losing a sale because of greed.
A word to the wise buyer
Real estate is a game, in a sense, where both sides hope to achieve each other's goals. This is why it always helps to understand your "opponent". In this case though, its better to think of them as your ally than your opponent since when you've found a home you like, figure out who the seller is, and what makes them tick, and you guys will be off to sign those papers pretty soon. Don't make assumptions. Take a step back. Put yourself in their shoes.
Sellers aren't the same as they were pre and post the economic downturn when greed and gaffe, respectively, ruled the mindset of almost anyone in the industry; nowadays, you'll be same to assume that everyone is in a level playing ground and no one is out to take advantage of you. Listen to your real estate consultant when they tell you that a property is a good deal, and catch the first wave of properties on the market now while sellers are still grateful to receive a reasonable offer, especially if it at least comes close to the value their home had before the crash.