Here we are again. I thought I wouldn’t be writing about this topic again for quite a while, but now that the pendulum is swinging in the other direction, we are finding buyers and sellers are at odds again.
Just two years ago, consumers were taking advantage of a buyer’s market and sellers were paying the price. The deals were extremely contentious, rarely went smooth, and usually ended with buyers and sellers closing in separate rooms. That was 2008, 2009, 2010 and early 2011. In February of 2011, the market started to shift. Looking back now, it’s obvious that it was the bottom of the market, but you don’t really know when you are there.
As the spring and summer rolled around in 2011, prices were stable and people were starting to compete for homes. A full year later in early 2012, we were in a full-blown seller’s market. Buyers were paying over asking price and waiving their contingencies. Late in 2012, sellers now realized that they had the upper hand and the leverage. Feeling like they had been beaten and bruised over the last four years, sellers got tough with buyers, dug in their heels, and used the market to their advantage. That again led to some contentious deals.
Just recently, I was working on a deal where the seller believed that his luxury home was worth XXX and the buyer believed it was worth YYY. The buyer wanted the home, but the seller realized that the market was in his favor and was not going to budge off his final price. The buyer would not even consider the data and reasonable proof. The discussions about the purchase price of the house went on for weeks and then months with no movement on either side. Contracts were written, countered and rejected. Egos got in the way and it became all about who was going to win and get the better of the other side.
I said this in 2008, 09, 10 and 11 and it merits saying it again in 2012. Even if the pendulum has swung and sellers have an advantage, Real Estate is not about winning or losing. It’s about getting the home that you love and are going to be happy in for years to come. It’s not about which side got the best deal and which side finally caved in. It wasn’t about that four years ago in a buyer’s market and it’s not about that today in a seller’s market. In your negotiations, remember the word compromise. Remember that it’s about being reasonable, paying a fair price for a fair value, and having a smooth and civil transaction. If not, you never know when the tables are going to be turned on you and you find yourself dealing with someone trying to take advantage of you.