WOW–tremendous responses and feedback on Part I of this real estate slowdown blog topic from last week. Thanks so much! Nice to know people are reading, following and giving thought to #tarrantcountytuesday.
Last week we established (with data) that there indeed is a slowdown — or market shift — in the housing market. One Dirty Reader asked about this “recession” and I would strongly caution the use of that word. There’s a big difference from a slowdown to a recession.
Is This Slowdown a Good Thing?
Many have indicated that this shift from a sellers’ market to a buyer-friendly market might actually be a good thing. I would agree.
As the data indicated, when prices are increasing so quickly, interest rates are going up — and individual incomes not keeping pace — buyers aren’t buying. That’s not good for anyone in the real estate business.
The pendulum is swinging more toward the middle — not a seller’s and not a buyer’s market — but a happy medium where real estate is beneficial and palpable for everyone involved.
Guidelines for Surviving This New Market
With change comes fear and with fear comes paralysis. That’s just human nature. In a shifting real estate market, sellers and buyers alike will need to pay attention to these key guidelines from their favorite Bow Tie Realtor and Real Estate Sherpa to reduce that fear and enjoy the home buying and selling experience.
Sellers: Buyers Will Pay for the Perfect Home
In the past six months, buyers have shown they are willing to meet or exceed the asking price if the home is “perfect.” What exactly does that mean? It means they want it to look like Fixer Upper or an HGTV show.
If a home isn’t an open concept home with grey walls, white cabinets, subway tile, hardwood floors, open shelving and trendy light fixtures — then it will sit, sit, sit.
It’s not that homes aren’t in good condition, it’s that prices have become so high that buyers expect perfection for a resale — or they will wait for the price to drop.
Call it what you want: Price Improvement, Price Reduction, Priced to Sell, Motivated Sellers … I’ve seen them all — and it all means the same thing: Homes that aren’t perfect were priced too high, so now the sellers are dropping the price to get the home to move.
Buyers: Don’t Get Greedy – It’s Not a Recession
I’m sure it’s pent-up frustration from buyers over the past three-to-five years of having to deal with lackluster inventory, high prices, multiple contracts, and over-asking price offers — but buyers need to chill out when it comes to trying to get the “good deal” that’s escaped them recently.
Certainly, it is more common to see below-asking price offers, but don’t get carried away. The goal of a buyer is still to buy a home, not to tick off a seller so much that they don’t respond to an offer.
If a buyer is serious about a property, make a reasonable offer — and expect an appropriate counter— but don’t expect to get a property for pennies on the dollar. It’s not a recession.
Separate the Wheat From the Chaff
It’s easy being a Realtor, right? I mean, everyone knows that a Realtor starts the workday at 10:30 a.m., makes flyers, drives around in a fancy vehicle, talks on the phone all the time, throws a sign in the yard and uses the price per foot valuation method to determine sales price and gets paid six percent for all that. Easy-peasy right?
A shift in the market will separate the wheat from the chaff when it comes to quality real estate sales professionals, mortgage lenders, appraisers, title companies and anyone else involved in the transaction.
Contrary to popular belief, being a GOOD real estate sales professional is demanding work. Unfortunately, when the market is unbalanced every Jane, Julie, and Harry thinks they can be successful and they are simply professional carpoolers and door openers.
A shift in the market brings out the BEST in real estate sales professionals and causes us to be on top of our game when it comes to pricing a home correctly, marketing it smartly, helping buyers find a property and get it under contract and navigate the rest of the buying/selling process.
This shift is going to hurt the discount or dot.com brokers, unqualified lenders, and other start-ups that have no value or business being in real estate. Goodbye and good riddance.
All Parties: Set Expectations
The biggest takeaway from this blog is that buyers, sellers, agents, and everyone needs to have the right expectations. Deals go badly and homes don’t sell because expectations aren’t set or realistic.
Whether it’s ego, fear, stubbornness, laziness, or incompetence — setting proper expectations on sales price, offer price, negotiating back-and-forth, dealing with inspections and appraisals, financing issues, title issues — it truly takes a team of professionals who are talented and dedicated and know what they’re doing to successfully navigate buyers and sellers through a shifting market.
If you need one, give me a call at (817) 980-6636.
If you disagree with this article, or if you agree, hit me up, and let me know — I’d love to hear YOUR perspective.
Well, that’s all from Tarrant County this week Dirty Readers. Thanks for reading and following and sharing! As always, if you have questions, comments or great ideas for a blog … hit me up!
Seth Fowler is a licensed Real Estate Sales Professional for Williams Trew Real Estate in Fort Worth, TX. Statements and opinions are his and his alone. Seth has been involved with the home sales and real estate industry in the Fort Worth area since 2004. He and his family have lived in the area for over 15 years. Seth also loves bowties! You can reach Seth at: 817.980.6636 or firstname.lastname@example.org.