By Rebecca Durfey
It is currently a challenging residential real estate market in many ways.
There are so many gimmicks out there listing the house for a short period of time to encourage bidding wars, promises like “make sure” you can stay in your house for weeks to months after it closes (a worrying prospect on a whole new level) . Find various discounts for using a specific agent or lender to promise to buy your home if it doesn’t sell.
These agents and / or investors may or may not keep these promises, but an experienced agent who has gone through and understands these market cycles – and who sees through the various gadgets while still providing sound and critical advice – may be more important than ever when you are think about how you should handle your most valuable asset.
As I have listened to our buyers, sellers, and appraisers, lenders and other representatives, there is concern that this market has become so out of whack. If you work in this industry, or if you are buying or selling a home, this is a topic of everyday conversation. The most common question: “When will this market even out?”
It is exciting and profitable to be a seller now. There’s nothing wrong with that. The investment aspect of their home has paid off. We know the real estate market is rising and falling – and this is currently favoring sellers. That’s great. What is worrying is that the market is so out of whack that we have buyers who feel like they have little or no chance of taking their offers, especially our buyers who are under in the market 350,000 reside and are restricted by their funds or credit programs. We also have sellers who have little incentive to negotiate and in some cases have unrealistic expectations of their buyers.
Perhaps the most worrying thing for me is when sellers demand or buyers are willing to give up some very important contingency – the protections that have been put in place for both buyers and sellers. We see offers that are well above market value, and reviews are not given. We even see sellers demanding and / or buyers willing to forego inspections in the hopes that you’re lucky and your offer will be accepted. Our buyers shouldn’t feel like they are playing the dice in a casino hoping to win big. Writing offers for private households has become a kind of lottery or game of chance.
Behind these offers are people and stories. You have worked hard to be able to buy a home and yet you have no control over the inability to do so – and that is very difficult to see.
Buyers are able, ready and willing, but also five, 10, 20 other buyers looking at the same house. There are some heartbreaking situations out there. There are some desperate individuals and families who are doing everything possible to secure a home and whose offer is still not selected. They may be uncomfortable or unable to do without an assessment or the inspections or other eventuality, leaving them on the sidelines without a home because enough buyers are “all in” and doing whatever they can to “win”.
I hope we don’t forget the very human and emotional elements that go with buying and selling a home. I work with many buyers whose listing has been selected and I am grateful every time, but I work with a number of buyers who have posted multiple listings and have been beaten by cash or reviews waiver and several other waivers. You’re protected, but it doesn’t make it easy.
I am very careful about explaining to my buyers and sellers what it means to forego a review or shorten the inspection days (I’ve never waived an inspection period and in my experience this would be for both a buyer and a very unwise case a salesperson to do), but I leave that decision as to what to do with them. Never have I ever asked a seller to forego a buyer in order to waive those contractual contingencies or inspections. I know a lot is happening. If a seller wanted these terms and conditions from his prospective buyer, I would immediately share the very real risks the seller would take in asking for these terms and conditions. That is not a wise requirement.
This is a market so out of whack that multiple buyers have been given the keys to their new home and found that sellers haven’t cleaned the homes or left debris in the homes. Fortunately, it doesn’t happen often, but it’s sad that it happens at all. I see more and more sellers who want to live in the houses for free for weeks or months after the closure. I can understand how to sign a lease and rent a house back if it works for the parties, but what a serious risk to buyers and sellers if there is no signed lease and security is not in place for both parties. Please make sure you are protected when leasing back or leasing back.
Hope we agents consider the importance of protecting our buyers and sellers. From the terms and conditions the sellers demand and sometimes demand, to the terms our buyers offer – sometimes they go all out in the hope of being selected – both sides need our solid, experienced, fair, unemotional, honest advice and advice Advice more than ever.
The market will adjust over time, but until then I hope we can be sensitive to each other.
Sellers try to find the right buyer for the home and make sure it closes on the closing day, and buyers try to secure a home that suits their needs. Hopefully we will all do our best and be respectful in doing so.
Editor’s Note: Rebecca Durfey is a Peoria-based real estate agent at Keller Williams Realty Professional Partners.