Buying a House in Steinbach
He had seen the house a few times, and loved it. Who wouldn’t? The ornate carvings surrounding the fireplace and trimming the grand staircase were among countless eye-popping details. The owners had spent decades adding many intricate details. The price had been reduced by over $40K, bringing it down the half-million dollar range. The buyer had been shopping within the original price range, and adored everything about the place. He decided to write an offer.
And what did he offer for this already-reduced home that he absolutely adored and couldn’t wait to own? He offered $50K less than the reduced price.
That’s over 10% of total asking price. (When’s the last time someone asked you for fifty thousand dollars?)
Just to get some perspective on this, think of the last time you listed your property for sale. Remember the price? Now imagine someone making an offer for 15% less. On a $250K home, that would be $37,500 of your money that the buyer expects you to fork over. Now imagine you had already, perhaps out of desperation, reduced it by that much. Now we’re talking about $75,000 of your hard-earned cash.
… Are you getting the picture of the unabashed greed going on here?
What’s worse, this is happening more and more.
Ever since people heard it’s become a buyers’ market, buyers have interpreted this as their right and obligation to hold sellers over a barrel.
What they misunderstand is that a buyer’s market is not a bully market.
What “Buyer’s Market” REALLY Means
A buyer’s market has little to do with price.
It means that buyers have more selection in their price range. Options are not scarce as they were in the sellers’ market of five or ten years ago. There are many choices in every price range. Aren’t you lucky?
It means that buyers have time. No more do they need to race an offer in to beat out competing buyers. No more do they have to decide after seeing a property once. Buyers are not time pressured, and have the luxury of being able to look, and look, and look some more.
Instead, many people are low-balling right now, and some are doing so offensively.
If you’re planning to offer in the near future, don’t demand tens of thousands of dollars from strangers just because you misunderstand the term buyers’ market.People don’t owe you their home equity any more than you owe them yours. It makes you look rude and dumb and downright greedy.
Don’t be that guy…
** Just a note about “that guy” — the story I share is a fictitious creation – a culmination of numerous people and characteristics. I guard carefully the privacy and dignity of my clients, colleagues, and others I come into contact with. This story was meant to illustrate a general common occurrence, not identify any one person or deal.
The amount and size of increasing low-ball offers though, is a real, accurate depiction**
Online house hunting can only do so much.
You cannot smell a house online.
Or open that mysterious door in the basement, or inspect the walls and ceilings for water damage.
You can rule out many homes online, but there are things about a property that you won’t know till you arrive.
This is where, with your own personally retained agent, you begin looking at houses. Lots of them. Sometimes lots and lots of them.
One such (fictional) couple was at the stage of looking. They had smartly retained me to represent them, and off we went looking for that perfect-for-them house.
Here’s how their search went down.
House one: He loved the garage but the master bedroom wasn’t big enough for her.
House two: She loved the kitchen but he didn’t want to be bothered with making the basement windows bigger so the children could safely sleep downstairs.
House three: The wood stove was something he had always wanted but she thought it was not safe for the toddler to be around. I suggested they could remove it but that would create a renovation project they didn’t want to pay for.
House four: She loved the character in the old house but he wasn’t interested in a property that only had a holding tank. It would be an added monthly living expense that they didn’t need.
House five: The floors had all been replaced, which was hugely appealing to both of them. However, the laminate floors had been poorly installed and already had areas separating and swelling from moisture. They both were super disappointed.
House Six: The backyard was amazing. They could both see themselves enjoying summer out here. Too bad the ceiling had been dripping and was causing mould in the upper level of the one and a half story home. Their son’s allergies would not work with that.
House seven: The ad in the magazine said it was a few minutes from the city. It took forty-two minutes to drive to the property and there were eleven miles of gravel road to travel. It was just too far to drive.
House eight: The open-concept living area appealed to both of them. She loved the large windows… until she saw who lived next door. She would not live next door to his ex-girlfriend. Not happening.
House nine: The smell of cigarette smoke was so strong they never even looked through the entire house.
House ten: The backyard photos were the reason they wanted to see this one. The towering apartment blocks next to the home put a damper on the private backyard life they had imagined. They ruled it out before we even looked inside. That was a quick walk though.
House eleven: Ten acres. Finally. They could have horses and other pets. The current owners enjoyed pets also. They just were not very attentive about cleaning up the cat litter. The rugs were torn in the doorways and in the stairs, apparently having been used as a scratching post. There were snakes, lizards, ferrets, hamsters, dogs, and birds living in the house.
The grass on the ten acres had not been cut in years and the grounds had become a dumping ground for old car parts. They certainly could not see their son playing on these grounds. How long would it take to clean the place? I think I saw her gag at the thought.
House twelve: They wrote an offer. They just wanted to move already. We went back to do a home inspection and when we arrived we found the basement flooded. There was no sump pit or sump pump.
The spring melt was coming up through the floor and the beautiful new rug was soaking wet. Thankfully, because they had the offer subject to a home inspection, they were able to get out of the deal.
Houses thirteen to thirty one: They compared each of these homes with the one they had fallen in love with and written an offer on. None of them compared. After a while, all the houses started to look the same.
House number thirty two: Adequate size. Treed yard with a garden. Finished basement. Bi-level with large basement windows. The floors were about five years old but they looked nice. The garage was not insulated but it was attached to the house and they liked that. The kitchen wasn’t as big as she wanted but it had a huge walk-in pantry. They could picture their life here.
I watched them as they quietly took it all in. They were in no hurry to leave. They started picturing where they would place their furniture. It all just made sense. Finally, they had found their home.
You might be wondering if I’m exaggerating. I don’t actually show that many houses before closing a deal, right? I must have just gotten caught up in the fictional storytelling.
YES, I’ve absolutely shown upwards of thirty houses to a single client. It’s happened a few times.
The fact is, house-hunting takes time. Lots of time.
If you take anything away from this story, I hope it is an appreciation of the buyer representative who dedicates themselves to you and your process.
We work hard, and are glad to show you loads of listings, regardless of whose sign is on the yard.
Accredited Buyer Representative
Sutton Group-Kilkenny Real Estate
Continued from Part I, please enjoy this fictional Real Estate tale.
The question hung in the air as Gary sat frozen with his calendar in one hand, palm pressed, tie arched. He gazed steadily into Celia’s eyes, waiting for her reply. Alexis perched on the edge of her chair and also made frozen eye contact with Celia. The silence thickened, and Celia’s eyes darted from one to the other.
“I’ll tell you what,” Gary broke in, taking on the tone of a friend, “if you’re worried about telling Ellie, I’d be willing to call her myself. We’ve worked together several times. I’m sure she’ll understand.”
“-After all, how else can you look at this property? It’s completely reasonable that you would allow me to show it. There’s no other way, and if she doesn’t understand that, then…” he shrugged.
“Oh, yeah… I guess that’s true…” Celia trailed off.
“So you would like me to call her for you?” He raised an eyebrow and pulled his calendar closer.
Celia sighed, and her gaze fell to the floor. “Sure”
“Great. Don’t worry about a thing. I’ll take care of it. And don’t worry – Ellie’s a good egg. She’ll understand.”
* * *
Gary smiled as he saw the ladies off. A wider, toothy grin spread across his face as he hurried back to his desk. He tapped Ellie’s number, eager to tell her the news. He had won, and she had lost. Again. Ellie had worked like crazy to break in to the market here, but she had no chance against old pros like him. And it was such sweet victory to prove it. He stifled a chuckle as the phone stopped ringing, and Ellie picked up.
“Ellie! Hey, listen. I just spoke with a mutual acquaintance – Celia. She asked me to call you.”
There was a silent pause, then, “Oh?”
“Yeah,” he grinned into the phone, “Celia asked me to let you know she’ll be working with me now. I assured her you would understand.”
Apparently recovering from a stunned silence, Ellie spoke sharply, “Gary, what are you doing? You know better than this,” her words gained speed, “She is my buyer. I’M showing her houses. I’ve been working with her for weeks! What did you say to her?”
Gary could scarcely contain his glee. He wriggled in his chair, and summoned his most gentle voice. “She came to me, Ellie. She was referred, asked me about a property, and requested that I call you to let you know.” A faint huff was heard from the other end. “I don’t know what you two had arranged, but she is making arrangements with me now. I thought you might appreciate the courtesy of a call.” He hung up, and leaned far back in his chair, nearly tipping it. The sweetest clients had always been the stolen ones. By this time, the major legwork had been done, and buyers were poised to buy. This would be a quick and easy commission.
They usually were.