The Biggest Mistakes Buyers Make!

Buyers have the run of things these days, with lots of inventory, more realistic pricing from sellers, and greater bargaining power. There are, however, many mistakes that Buyers are making that hurt their ability to find the home they are looking for at a price they are comfortable with. With that in mind...

• Buyers have become too "price focused", both on the list price for a given property or on the terms of a loan when selecting a lender. This is a topic unto itself and space does not allow for a full explanation, but keep in mind that Buyers and their agents must do their homework when evaluating the price of a home by checking the recent"sold" activity in the target neighborhood, any and all tax records, as well as taking a look at local conditions that may affect value and sales. Keep in mind that many sellers are pricing their property unrealistically based on rapid appreciation from several years ago, an inflated ego over the value of the property, as well as plain ol' misinformation about current market dynamics. That said, doing necessary homework will aid the Buyer in making a well informed offer, or selecting a lender that is local, trustworthy, and provides good faith estimates of expected transaction costs.
• An add-on thought to the one above is that many Buyers right now seem more pre-occupied with getting a good deal over getting the home they want for a price they are comfortable with. Too often these days Buyers are wringing their hands over price, certain that everything is overpriced, and feeling that they can name any price that they want and sellers are obligated to accept. There is no truth to that. Buyers should keep their focus on the fact that they are buying a house that they will make into a home to be loved and lived in, possibly for a long time. They must also consider future appreciation and re-saleability but focusing on getting a bargain for the sake of getting a bargain will likely miss all the points stated above.
• Buyers frequently try to meet Sellers to a) quickly end negotiations and b) create a "positive relationship" that they think will benefit them. There is almost always more harm done than good in these cases. Contact between Seller and Buyer frequently creates either sympathy or animosity towards one another, which often causes the parties to lose leverage, bargaining power, and/or the possibility of a deal altogether. The highly important role of your Real Estate Agent is to keep the transaction fixated on facts, and eliminating, as best as possible, personal aspects that can derail the possibility of a win-win transaction. This is not to be underestimated!
• Buyers frequently select the wrong inspection option because they have not strategically thought through the process with their goals in mind. GA real estate contracts allow for 3 different inspection options. Each option has very different ramifications and should be explored thoroughly between Buyer and Agent to find what best suits their needs.
• They don't pay for a survey of the property. Having a survey completed prior to closing a transaction can save buyers lots of aggravation and misunderstanding. Do not dismiss the importance of knowing EXACTLY what you are getting for your money.
• Buyers do not create a formal relationship with an agent they trust. A Buyer/Agent relationship, both personally and professionally, is terribly important to exacting a sale that is a win-win for all parties. All too often buyers refrain from working with just one agent as they may fear that they will be "tied down" or "locked" into something that will harm them. Nothing could be farther from the truth. First, an Exclusive Buyer's Brokerage Engagement can be broken at any time in writing if the relationship is not going as expected, protecting both buyer and agent. Second, trust is not to be undervalued, and when there is a commitment between both parties, with expressed understanding of everyones responsibilities, then there is far greater likelihood of a positive buying experience with both parties invested in seeing the deal through to the end. Buyers who bounce around to the "agent of the day" to simply show them properties do not benefit from the trusted assistance of an agent committed to them.

So, Buyers have much to consider when making the all important decision of buying a home, especially in a fast paced and ever-changing market!

Mistakes not to make! A Sellers Perspective

In this market, and in any market for that matter, here's what we see as the biggest mistakes that Sellers make in the process of selling their home.

• They do not make important repairs prior to putting their house on the market. Obvious, or even less than obvious flaws will likely be discovered by the buyer, the buyer's agent, and most assuredly by the inspector that the buyer hires. Save yourself time, anguish, and money by taking care of the big problems in advance. Too many times contract offers break down when a buyer finds a major defect that spooks them from moving forward with the transaction. Don't be in that position!
• Along the same line of thinking, Sellers don't make needed cosmetic improvements that maximize value and appeal to buyers. A little time, effort, and freshening up goes a LOOONNNNG way to showing that the home has been loved, cared for, and is attractive enough to be bought by others. If you don't know how or what to do to freshen your homes' look, call any one of us and we'll be glad to help you out.
• They price their home competitively against the ACTIVE listings on the market in their neighborhood, not the SOLDS. In this market, pricing against what has recently sold is IMPERATIVE! The current adage is, in this market "you must be at the top third of quality and condition, and in the bottom third of price" to have your home stand out and sell.
• They don't make their house easy to show. Showing by "appointment only" is a deal killer! If a stay-at-home mom needs a heads up before showing, or you have pets that need containing prior to showing, no problem, just make the opportunity to show the property as easy as possible - buyers crossing the threshold increases the likelihood of a home selling.
• Sellers not leaving the house during a showing. Having the home feel as neutral as possible, like a model - and not like somebodies home - help buyers feel like they are not intruding on someones personal space. It may sound funny but sellers typically make buyers feel ill at ease if they are hanging out when viewing their home, whether they mean to or not.
• Sellers don't counter "low ball offers". ALL OFFERS ARE GOOD OFFERS! Frequently buyers will float a low offer to see what the response will be and possibly get a steal of a deal. If sellers choose not to respond because they feel insulted of otherwise take it personally, they are most definitely missing out on the possibility that the buyer is just "fishing" and is really willing to pay closer to the list price.
• Sellers think it is okay to try and price their home high now, giving themselves some "wiggle room" and then lower it if it doesn't sell. There are countless reasons why this is a bad idea, particularly in this market. For the sake of brevity, ask us why and we'll tell you why sellers shoot themselves in the foot by doing this.
• They choose their agent based on the person who "likes their home the most" and thinks their house is worth the most. Feel-good listing presentations and unrealistic assumptions about what a sellers home will sell for is an absolute killer. There is a reason why there are more "withdrawn" and "expired" listings now than there have ever been, and cheer leading real estate agents who do not speak frankly with sellers about the local market sales activity are prime reasons for this.
• Sellers frequently price their home outside of important "price points". Ask us what is meant by this.
• Sellers are frequently bad about listening to stupid people.

For sellers, this is a lot to keep in mind. Do not doubt the value of these points, however, if you or someone you know is trying to sell a home. We've found that addressing these things head on makes ALL the difference.

Selling in Atlanta in a Buyer's Market

I recently read an article from John Adams, who writes for the Atlanta Journal Constitution as an expert in Atlanta real estate, (see his site at www.money99.com for more) and was reminded of the absolute necessity of using current market data in consulting with sellers AND buyers in this tumultuous market. The Atlanta real estate market has devolved from a "metro" market into a "micro" market, meaning that sales trends are varying dramatically throughout the region, even to the subdivision and neighborhood level, and must be evaluated accordingly.

I have found that selling a home in this market is based on three basic must haves - that it must be priced right, it must look good, and it must smell good. Again, evaluating sales data is important to establishing a price point that will get a buyer's attention, and pricing real estate to sell in Atlanta can have nothing to do with what the seller paid originally for the home, what they want to net for the home, or what they think it is worth. Those may seem like harsh words but buyers have too much to choose from, lots of desperate sellers to float offers to, and little patience for overpriced listings that are not in good shape or showing condition.

I have also found and heard stories of many real estate agents who will wow sellers with high prices and inflated expectations about how quickly they will sell your home - in order to obtain another listing. Seller beware! These are precisely the situations that are behind the staggering number of expired and withdrawn listings that have failed to sell in the Atlanta market (approximately 55%-60%). Remember the buyer's market axiom when preparing to sell: your home must be in the top third of value (meaning quality and condition relative to the homes in your area being compared to) and in the bottom third of price to get significant attention and increase the likelihood of a sale. Building in "wiggle room" or negotiating space in unwise at this time, as you will likely scare off an otherwise interested buyer by the higher price, relative to the competition.

It will be interesting to follow what happens in this market as we move forward. I am also receiving some good information about larger market dynamics that will most assuredly affect buyers/sellers down the line, and will pass anything on of value as I receive and make sense of it. Until then...