I recently followed a thread on social media. A frustrated Buyer was complaining about her inability to purchase a home after making “great” offers on four houses. The owners of these homes are “money hungry” and “greedy” she said. The writer went on to say the homeowners “don’t know what it’s like” and are “selfish” for not prioritizing the Buyer’s emotional investment in their home over their bottom line.
Wow. Where do I start?
As a Realtor® who lives, works, lists, and sells in this hyper-Seller’s market let’s separate fact from emotion. First, there are greedy homeowners. I have had to refrain my eye-rolling in front of homeowners who are disappointed that they “only” got list price on their home or “only” received 5 offers when their neighbor got 10. I have had to tell a client “No” when they asked to go back for more when a Buyer has presented a spectacular offer. However, I can attest that those homeowners are a fraction of my listing clients.
The truth is, the owner of the home you want is not an instigator of the auction-style method of home buying. They did not scheme a scenario to require you to bid against an army of competitors. The Seller does not demand that you bring thousands of dollars over appraised value for the privilege of buying their home. In short, the Seller is not the creator of this market. The factors that put the homeowner in the position of holding the rose in the real estate version of The Bachelor are as complicated as Keynesian Economics and as simple as supply and demand.
In short, there are way too many Buyers for far too few listings. The Central Ohio market should have 15,000 homes on the market to provide even supply and demand. At this writing there are 1600 homes available. Our housing market is a bakery with no bread on the shelf. When a hot loaf comes available, there are 25 Buyers in line to purchase it.
A smart Realtor® advises the homeowner to price their home close to perceived appraised value. Then the home is listed and the “for sale” sign on a new listing goes up. The sign is synonymous to a red flag in front of the bulls of Pamplona. As many as 40-50 Buyers are going to view the home in a period of less than 72 hours. This results in a dozen or more willing to make an offer ~ all over list price. Virtually all of the homeowner hopefuls will waive the right to ask for repairs after a home inspection and most will be willing to give the Seller some money over the appraised value. Many will give the homeowner the right to live in the home after closing for up to 60 days at no charge. That is a normal offer in this market. So, if that is “all” the Buyer is doing, it’s not enough. The winning bid will offer to waive the home inspection altogether and give even more cash to the Seller in the form of even more money to cover the “appraisal gap” or to pay the Seller’s real estate fees. Or both.
Who is driving this frenzy? The greedy homeowner? No. In fact, the homeowner has done nothing but choose to sell their home, vacate for a few days for showings, and show up on Day 4 to view the offers.
What is driving this frenzy? Low interest rates, the hope of home ownership, and Buyers willing to break all conventional rules to own their piece of the American Dream.
Who benefits from these factors? The homeowner in 2021. Not the greedy homeowner. Not the selfish homeowner. Just the homeowner who happens to need to sell in an economic environment that we will likely not see again in our lifetime. And, the winning Buyer. They carry a couch into their American Dream and (hopefully) never look back. Did they pay too much? That’s next week.
This Blog is written by Kathy Chiero, Lead Agent for The Kathy Chiero Group. Thinking of Buying? Get a copy of my free book “Ten Ways to Win in a Challenging Market” Visit us a OurOhioHome.com Ready to sell? Contact us for a no-obligation analysis of the value of your home.