If you’re a buyer in today’s housing market it’s safe to say your hair is thinning if you haven’t pulled it all out already. Buyers all over the nation have put their home searches on hold and sat back down on the sidelines after the housing market has continued to chew them up and spit them out, but before you start pointing fingers at the housing market, I want to point my finger back at you and talk about the biggest mistake homebuyers are making in this market today.
I am going to talk about the mistakes YOU’RE making in this housing market. Well, not just you, You’re getting influenced just a little bit and I’ll tell you how, but before I do I want to tell you a little bit about why buyers like you are simply giving up on the American dream.
There was a survey done a little while back by one of the large real estate giants out there where they surveyed 850 consumers and determined that 4 out of 10 people who are looking to buy a home have put off their search until next year.
With that in mind, what’s going through their heads? Well, for starters, there’s some uncertainty with COVID-19 in the market stil, especially with the newer variant coming out and causing even more concerns than before. Secondly, the market is just flat out intimidating. Just two years ago I had a few clients who viewed a home one night, slept on the decision, then slept a little longer on the decision and was still able to get an offer accepted with that delay.
In today’s chaos, you better have an offer in hand when you’re viewing the home or you’ll miss out especially when you’re seeing homes on the market for 4-7 days with a bidding war between 10 agents and offers so above asking price you wonder what bank they robbed to make that happen. On top of that, agents are putting a little pressure on their clients to pull the trigger and make a decision (I hope not to push the sale, but rather because they understand how the market has been acting lately).
Thirdly, there just aren't enough homes on the market, plain and simple. Which has been driving demand and creating this massive intimidation factor. As for the buyers who want to sell, they’re head is spinning 1000 mph trying to figure out where to live next. Do you live on Uncle John's couch for a little bit? Make space in Aunt Edna’s basement? Or worse, move in with your relative and their spouse that barely get along?
The options are endless, but all jokes aside, this is the reality of what’s going through a seller's head. They are willing to throw their homes up for sale without even having a plan just so they can have a little more money in their pocket not realizing they sold at a premium and have to buy at one too. If you have a place you can fall back on and call home temporarily it may not be a bad way to go, but I know that is even hard to come by.
Lastly, buyers are putting more and more offers in than ever before. A couple years ago you could view one house, submit one offer, and get one offer accepted. In this market it’s a little unlikely unless you robbed that bank I mentioned before. With that in mind, buyers' biggest concerns are finding a home they love that’s within budget, paying too much for a home, finding a neighborhood they actually want to live in, interest rates rising and finding major concerns after moving in that’s going to empty whatever savings they had left.
On the other hand, there’s buyers who are taking full advantage of the market slowing down. Bidding wars have eased up a little bit and believe it or not, more sellers are making price adjustments. Why is the market slowing down? A couple of reasons, more buyers are taking a seat, reducing competition, the kiddos are going back to school so that is a plus one for buyers and a minus one for sellers, and of course it comes down to the seasons as well. People like to move when it’s nice and warm, most people don’t want to get their Uhaul stuck in the Michigan winters.
With that being said, there’s some mistakes being made that you need to be aware of. It’s not necessarily your fault, but bear with me. Your brain has been taken over or hypnotized by the media and keyboard warriors alike. When you think about the housing market, you imagine this sinking ship that just happens to be on fire too. You’re assuming the worst and it’s going to get you in trouble if it hasn’t already.
Maybe it’s your real estate agent that’s filling your head and saying it’s impossible, that you have to offer $30,000 over asking price, waive the inspection, include a gift card for a dinner for two and sacrifice your first born child all within the due diligence period of 5 days. That’s exactly why it’s important to have the right real estate agent on your side (especially in this market) to make it known that homeownership is possible. Don’t assume the worst, and take a seat on the sidelines like every other buyer is doing.
The best way to avoid these unrealistic demands is to have your agent contact the listing agent and ask a simple question “What are your sellers looking for in an offer” It seems clear and obvious, but based on real-life experience, the conversations I have had with some buyers agents for my listings had me second guessing their intentions for their clients. For example, why would you hop on the phone and give me a verbal offer of $15,000 over asking price if you don’t even know if there’s another offer or if anyone else has even toured the home? Exactly, doesn’t make too much sense to me either.
Moral of the story is, don’t get discouraged as a home buyer in this market, be patient, stay on the lookout and don’t overload yourself with so many opinions that your hair starts turning gray.
Andrew McManamon is a Michigan REALTOR® with Signature Sotheby’s International Realty and provides real estate services to Buyers, Sellers and Investors throughout SE Michigan including Livingston County, Oakland County, Washtenaw County, Genesee County & beyond. Andrew has become one of the rising stars of Michigan real estate agents. Prior to his real estate career Andrew was responsible for managing a senior living facility in Brighton, Michigan as a dining supervisor and an activities assistant. Andrew’s passion to help people is unlike any other, and he continues to strive to be best resource he can be. Andrew graduated from Cleary University in Howell, Michigan with a double major and currently resides in White Lake, Michigan.