The Buyer Process

You may think the buyer is not the process but they may be just that.  All buyers want to know the process of buying.  They want to know about the types of sales, market conditions, where can they find the best home for them, legal rights and responsibilities, contracts and forms, and on and on.

The truth is, though, all too often it is the buyer itself which needs to go through the process.  They know I do this every day but sometimes they think they have a better handle on what it takes to buy a property than me.  The internet has definitely given buyers much more knowledge than ever before.  The problem is, buyers tend to take in what they choose and leave the rest out.  They read about real estate but what they read doesn’t necessarily reflect the market they are looking in.

The simple truth is, the market I am working in is a seller’s market.  It’s really pretty simple.  There are more buyers than sellers, therefore sellers get to manipulate buyers against each other.  In fact, I am consistently telling buyers that they are not competing against the sellers, they are competing against the other buyers.  Of course, there are some exceptions but this is probably going to be true when you run across the perfect house.

Nobody wants to overpay for a home.  I don’t want them to either.  But, I hear buyers saying they want a “deal” every day.  That often means they have an idea of what they should pay based on the listed price of the home.  Unfortunately, listed price is merely a starting point.  Different sellers use that price with different goals in mind.  Some are content to price high and wait for the market to rise to the level they want.   Others price low to get multiple offers and sell quickly.  Some price the home correctly.  The listed price is not the best place to determine what a buyer wants to offer.  They need to understand the market and make their decision based on the bigger picture.  Focusing on the list price is simply too narrow a scope from which to work.  It doesn’t take long for buyers to realize their competition tends to be other buyers.  The problem is, they have lost out on homes they would have loved to own.   These are the very buyers that are getting homes while other buyers are out looking for “deals”.  At some point, most buyers realize, for a variety of reasons, that now is the time for them buy.  The good news is that interest rates are low and prices are still bouncing off the bottom.  By any reasonable measure, paying a fair price for a home is a good “deal”.

Another factor is some buyers are reluctant to compromise.  They know what they can afford, where they want to live and what type of home they want with all the required amenities.  In these low inventory days, homes that match every aspect of your wish list are few and far between.  A husband who wants a Craftsman style home with a big yard and a wife who wants contemporary and views of the ocean are going to be hard pressed to find the one home that meets both expectations.  There needs to be compromise.  Price and condition also tend to lead to a need for compromise.  You will have a hard time finding a move-in ready home for the same price as the fixer upper down the street.

When buyers struggle with purchasing a home, they may be tempted to blame others.  The easiest avenue is to blame the seller.  ”That guy is asking too much.  His home isn’t worth that.  I wouldn’t pay that to live there.”   The problem with that logic is the other buyers.  They are willing to pay what the seller is asking, often more.  The price really isn’t determined by the seller, it is determined by what a reasonable buyer is willing to pay.  With low inventories and the accompanying circumstances with interest rates and prices, they value the timing of buying in this market.  They are not deluding themselves into thinking a house will come along and sell for less than it is worth, or a “deal”.  They are