It is no secret that most housing markets are tilted towards the buyers. In general, there are more properties on the market than this time last year, and there appear to be a lot less qualified buyers out there ready to make a purchase. This definitely puts a downward pressure on area home prices and stresses out sellers that are currently on the market.
For myself, being primarily a listing agent, I am seeing a growing trend that is quite concerning. In such a strong buyers market, it is no surprise that many sellers are feeling taken advantage of during the negotation process. With the excessive intentory on hand, buyers know that they have the upper hand in selecting a home.
A negotation example would be that the seller receives what the seller believes to be a “low ball” offer. The seller then tries to counter the buyers offer, but the buyer doesn’t budge much. Ultimately, the seller settles on a price much lower than they had originally expected to sell at.
The buyer and seller then proceed to the next phase of the contract/negotiations process. It’s called the “option period”. This is the period where the buyer has “X” amount of days (usually 7-10 here in Texas) to get inspections and has the unrestrictive right to terminate the contract for any whatsoever. Assuming that the buyer hires a home inspector, the home inspection is completed and the seller is presented a list of repair items that the buyer wants the seller to repair. Many times this repair list can be quite lengthy. Especially in older homes. The seller usually has been living in their home for some time thinking everything is just fine, and then all of a sudden an outside 3rd party comes in and picks their home apart.
So when the buyer presents to the seller their requested repair list, the seller naturally gets defensive and usually becomes upset with the buyers requests. Not only does the seller think that the buyer has already received a great deal on the home, they now feel taken advantage of because the buyer is asking for more.
Sometimes buyer and seller are able to negotiate the repairs together and agree to terms, but I have seen many deals almost come to an end at this stage.
The remedy I suggest to this dilemma? Seller’s and listing agents…. are you listening? GET A PRE-LISTING HOME INSPECTION DONE PRIOR TO LISTING THE HOME FOR SALE (and do some repairs upfront)! When sellers list their home for sale, they are usually excited and are very willing to listen to realty professionals advice on all topics (recommended updates, staging, decorations, etc…). If a pre-listing home inspection is done and the seller makes and documents the repairs made, once a contract is received, negotiations between the buyer and seller will go MUCH smoother and a lot less emotional for the seller. Here in Texas, it also allows the sellers to make the repairs by a handyman (can save the seller money). However, once under contract with a buyer, any buyer requested repairs that are agreed upon by the seller must be done by licensed technichians (can be costly).
Not only that, but when a buyer comes along and has narrowed down his/her home search to two or three homes, the home that has been pro-active and has already had a home inspection and a few repairs made, will likely be a more appealing candidate to receive an offer from that buyer. This point, should be very interesting to a seller in such a tough market.
For more information, please visit: www.RealtorRhodes.com
Enjoy the day!