Note: This is the latest post in my series of the ABCs of Buying, Selling and Investing in Real Estate. Each post, I select a letter (T this post) and write up a fictional advice column around the letter. The story is fake, but the advice is real(ty).
This post continues the story found in Three Terrible Ideas all Home Buyers Must Avoid At All Costs
One Fall Tuesday afternoon, I was approached by a tall young man, while at my favorite coffee shops. He asked if he could join me, which I gladly accepted. He introduced himself as Thomas, the railroad worker who had called me a year ago about the troubles he was having with his home search process. Specifically, his best friend Percy was not doing a very good job of getting him a home. I had only talked to Thomas on the phone so I told him it was nice to put a face with the voice. I asked him what I could do for him. He said that he had finally given up on Percy finding him a house about six months ago. They had continued their search for those entire six months and not been able to find anything. Percy finally decided to save their friendship versus continuing working with Thomas so he had referred Thomas to another agent. This agent had been helping him for the last six months to no avail. Thomas still did not have a house to call his own. He had finally decided to just give up, but wanted to talk to me first before doing so. He said he had appreciated the advice I gave him before even when I wasn’t his agent. Thomas wanted to know what he could do to re-energize the whole home search process, because he was burnt out.
This is what I told Thomas….
First, I thanked Thomas for thinking of me. It was always great to be remembered by both clients and customers alike. I then told Thomas that I understood his frustration. I told him. “This housing market is still very tight one for buyers with less than two months of inventory being the new normal(instead of the six months inventory). There is simply not enough homes for the flood of buyers coming into the market every day. Home developers are starting to build more new homes, but it can still take some time for the inventory to see a turn around. Thomas is most likely facing the same market for the next year or two. This stress can make the whole home search process painful at the least. Even if buyers do find a home that they like, they are usually facing stiff competition with difficult choices on how much they are willing to pay for a house right now. Offers can be made more appealing by increasing option/earnest funds, offering to pay for a survey and even foregoing requesting any closing cost assistance. The trick is to make the offers as strong as possible with a sales price offer that is still rational in the minds of the buyer. Despite these tricks, it can still be very easy to get burnt out on the home search process.” I told Thomas about three steps to re-energize himself.
- Take a Breather – The first step is what Thomas had already decided to do. He needed a break from the process for awhile. I realize that this might seem counterproductive considering you might miss out on a perfect house by taking a break. However, for a peace of mind that leads to more rationale decision making, a break is good when any process starts to get overwhelming. I had one young couple who was expecting their first child and they had some very strong opinions on what they wanted in a house. We looked for two months with each house not being even close to what they wanted. At Christmas, they decided to take a break, even though they needed to get a house before soon for the new baby. The couple’s rationale was that they simply could not stand to look at another house. We started looking again at the new year and found something before the end of February. I could tell when they came back that they were feeling refreshed about the process and had a more realistic approach to what house they wanted. In other words, taking a break will help you with the next steps in this process.
- Reevaluate your List of Needs – We all have our dream home. It is the home that will have everything you want in it so you simply move in your stuff to make it your own. In a seller’s market, it might be time to reevaluate this dream list of needs to see how realistic it is to find a home. You might keep the list, but prioritize the needs based the ones that “must’ be present and the ones that you could skip if forced to do so. You could even go further and weight each list item and have a final score that you must reach to put in an offer for a home. The final score could be made up of any of the list as long as the final total matched your bare minimal for a house. With the young couple, we ended up doing this with their list (must have and not so much haves) and it helped considerable when they saw that with the revised list that there were actually homes on the market that match their baseline criteria. Their eyes sparkled knowing that they would have several options to see the following evening. It completely changed their outlook.
- Search in another area close in proximity – Location, Location, Location is always been the phrase associated with real estate when it comes to selling a house. It plays as big role in the home search process as well. As with the dream home, we all have places we would like to live. You want to be where you want to be no matter the reason. However, in a tight seller’s market, there simply might not be enough homes on the market for the buyer to find a home in their target area. Of course, the way around this problem is to widen your acceptable areas to close proximity to your desired location. It does wonders to re-energize a home search because you suddenly have several more options to consider. With the young couple, their target area was not happening as most homes were going way over value and they were gone in a weekend. I suggested to the young couple that they might want to look at some homes further east than their target location. After showing them how many homes fit their needs list, they readily agreed. We found a home about two weeks later.
I finished by telling Thomas that these threes steps should be followed in order for him to get a fresh start on the home search process. It was all about hope that you can find a house and these three steps go a long way towards instilling this new sense of hope. Thomas said he could relate as he had already been away from the process for a couple of weeks and was feeling better. He said he would sit down with me to go over his list so I could possibly suggest some other areas for us to look when he began his search the next month. I smiled inwardly as he began to list off some of those items already. It was going to be a fun month.