Tag Archives: motivated sellers

Strange Rites of Passage

When you work in real estate inexplicable things come up that often boggle the mind. Things that throw you off kilter for weeks, trying to figure out the answer to the age-old question: “What were they thinking?”

Sometimes it’s best to avoid going there.  Practice good mental hygiene.  Don’t over-think whatever it is “they” might be thinking.  Stop trying to make sense out of things that don’t make sense.

But…of course…this is Real Estate of Mind.  Dedicated to the exploration of both the sacred and the profane. The undiscovered country where brains suffering the post-traumatic effects of real estate regularly unravel to sort themselves out.

We keep some of them in specimen jars on the shelf.  Someday we’ll open up the secret vault for public viewing.  But in the meantime…what should we mull over today?  What odd bone of contention has real estate tossed up for us to chew on?

How about this?   In a market where it is incredibly hard to sell a house, why are so many places so incredibly hard to get in to see?  Why so many stumbling blocks? Strange rites of passage buyers have to go through just to earn a peek?

Maybe I haven’t plumbed the full depths of my dog-eared copy of Real Estate for Dummies yet, but isn’t there a relationship between offering something for sale and actually letting prospective buyers examine the goods?  Don’t they have to get to first base first, before you can expect them to make it home?  Why so many blatant cases of Seller IDD (Intention Deficit Disorder?)

In the good old days, the frequent phrase on the MLS was:   “Offers Subject to Inspection.”   It meant certain properties couldn’t be viewed until you wrote an offer.  That’s right! The dubious opportunity for Buyers to write blind offers on places they hadn’t seen.

Not a particularly appealing sales m.o. in the here and now.  Better suited for markets like 2004/05 when frenzied buyers were willing to offer almost anything for any place under any circumstances, just to get their big toes in the door.

Nowadays, there’s a more insidious version of “subject to” rising up from the quicksand. For lack of a better name, I call it:  ” Showings Secretly Subject to Offer.”

Tough to describe. One of those things that makes one say:  “I’m not sure I smell what the Rock is cooking  here.”   There are way too many places, ostensibly for sale, that when push comes to shove and prospective buyers come to town, it turns out they really don’t want to show themselves after all.

So what’s up? Why are increasing numbers of people putting houses on the market without committing to the basic notion showing them?

Most obvious scenario?  Tenant Occupied. Why would any self-respecting tenant cooperate fully in a process that could result in a 30 day notice?  That’s not Human Nature 101.  Any agent who has shown houses occupied by renters understands 1001 ways they can subtly vibe buyers and ruin the mood.

What else? Short sales. If a Seller knows that there’s nothing coming out of it other than another chapter in a long tale of woe, there’s not a lot of incentive to roll out the red carpet.

Then there’s the fishbowl effect. Not a single soul likes living in a house that people come tromping through, poking heads into closets.  It’s an uncomfortable experience. Some sellers start out with the best of intentions, but wilt quickly along the way.

Perhaps in some cases it’s deeper.  A factitious disorder of the mind similar to Munchhausen’s Syndrome.  People exhibit symptoms of selling.  Hire an agent to create a lot of attention.  If the house sells, they’ll stop getting the attention they desire. So they make up excuses not to show it.

For some, resistance to showing is a form of passive/aggressive behavior.  Sellers are angry that the market is lousy.  It feels personal.  All those looky-loos not stepping up to buy are stealing their equity.  What better way to punish them than the “Ole” trick? Hold it out in front of their noses and then pull it back as soon as they show interest.  They’ll see who’s boss!

And finally,  maybe its all part of  the elaborate wish-fulfillment fantasy many Sellers have ingrained. There’s always one imaginary buyer out there.  Willing to step up. Pay cash. No questions asked.  The logical extension of this one-in-a-million chance at the lottery is:  you only have to suffer the inconvenience of showing your house once – to this same exact right buyer.  You can edit out all the other unwashed tire-kickers before you even have to make the bed or do last night’s dirty dishes.   One showing. One perfect offer. Priceless!

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ARE WE BUYING INTO A BUYER’S MARKET?

Where were we?  Oh yeah. We were talking about the phenomenon of multiple offers during the heyday of market madness. A million years ago.  Pre-apocalypse. Way back in 2004-2005.

It was a Seller’s Market.  Every time you ventured across the threshold of a new listing you had a pre-programmed list of questions already rattling around in your head:  How many offers do you have? When are you accepting offers till? Are you going to issue multiple counter offers? What (besides the highest price that can be squeezed out of us wanna-be’s) is the Seller  looking for? Incredibly short contingencies?  A specific escrow officer? An absurdly long rent-back period?  A non-refundable deposit in the form of my first-born child?

The underlying truth about all these questions  was this – there was simply no question about who was in charge . Sellers said jump. Buyers rolled over and responded with a resounding refrain of: “How high?”   They didn’t like it.  But it was easy to justify. Put up with all this bullying of the buyer business and sooner or later you get to be a seller too.  Then you’ll be in the driver’s seat of the bus everyone else is chasing. Payback time gets paid forward.

So here we are on the other side of the inside-out Real Estate Universe. It’s a Buyer’s Market – or so everyone is telling us.  And in a Buyer’s Market, all the opposite things are supposed to be true.  It’s not how many offers do you have? It’s have you had any offers at all?  Even a low-ball one, way back when you first went on the market, four months ago and now feel stupid for not taking it? It’s how motivated are you? It’s how much stress is there, getting swept under that freshly vacuumed rug or stuffed behind that neatly staged couch or hidden in the recesses of that way-too organized closet?  It’s when are you going to lower the price again dummy? And it’s are you ready for all the extra grinding I’m going to do even after you end up accepting my insulting offer over all your own worst gut-wrenching objections?

And yes, in an ubiquitous Buyer’s Market, it is some of the above, some of the time. But to the growing surprise of many, it isn’t all of the above all of the time.

In fact we are seeing things that we aren’t supposed to be seeing in a Buyer’s Market.  A series of odd apparitions. A surprising number of multiple offer situations cropping up all over the landscape. Not on every house. Not in every neighborhood. Not across the monopoly board in every single price range. But they are there in numbers far greater than one would have expected, given the hope and the hype that Buyers in a Buyer’s Market can’t help but buy into.

Strangeness in a Strange Land.  Multiple offers don’t belong here. Buyers aren’t supposed to be competing with other Buyers. Not now. Buyers are supposed to be sitting back. Taking it easy. Biding their time.  Waiting patiently for it all to get sublimely worse. They shouldn’t be in a hurry to get anywhere. They should be drinking lemonade.  Lounging in the lay-z-boy.  Indulging in a some righteous channel surfing along with a bit of slow and disinterested MLS surfing. While all those anxious Sellers grow more and more desperate by the day and the hour and the minute. Buyers just aren’t supposed to be duking it  out with other Buyers for the privilege of purchasing a property in a Buyer’s Market!

So what gives? Why is this happening? Who or what is rewriting the rules of how this is supposed to work?  Why isn’t this the golden age of the real, first-time Buyer, like it was in 1994 when over half of the sales involved Buyers who had never owned a home before. Those fortunate Buyers who watched in awe as a wonderful window of opportunity opened up for them that they thought had been closed forever by the peak of the market in the late 1980’s.

Why isn’t this a better market for move-up Buyers? It should be. When prices are going down, there should be better demand for lower priced homes, while higher priced homes, larger and better, get disproportionately softer and more attractive in price.  Move-up Buyers should be gaining on the changing market right now, specially when interest rates have remained so artificially low.

And yet. And yet. These aren’t the Buyers that are being welcomed with open arms into this Buyer’s Market. At least not enough of them.  Next week, let’s examine some of the shadowy substance lurking behind the scenes.   Is this what happens when banks have too much control over both sides of the marketplace?  A stranglehold on both supply and demand?

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