Two posts ago it was suggested that buyers are feeling anxious due to increasing prices, and it is definitely a real concern.
But the buyer anxiety is being fed by a number of other reasons too – things that are just as annoying!
Other Causes of Buyer Anxiety
Few Listings to Consider – The inventory is thin because homeowners are keeping their highest-quality properties. For buyers, that means a thin inventory in general, and virtually none of better-quality properties available at decent prices. When a hot new listing does hit the market, buyers come rushing because they know it could be months before they see another one
Hard to “Keep Your Chops Up” – With so few to consider, how do you know if the list price is right? How do you know if you should go up or down on price? How do you keep paying such close attention to every detail, every pending, every closed sales price, etc.??
Losing a Few Bidding Wars – There are other buyers more frustrated than you, and those with more horsepower will bury you with higher/better offers. You are going to lose a few bidding wars before you get to the same position, and offer high enough to win.
Lack of Rules/Regs on Bidding Wars – Not only are there no guidelines on how to handle multiple offers, but listing agents have no qualms about telling you that they are going to do one thing, and then do the opposite. Example: It happens regularly that a buyer will make an offer, and be told that there will be a chance to improve it at the highest-and-best round. But then the H&B round doesn’t happen, instead it’s the Dear John email, with the obligatory “sorry” from the listing agent at the end.
Sellers Don’t Have to Sell – Have you offered at, or over list price, and been countered? Yep, it happens all the time, or how about when you offer at, or over list and get no response?
Realtor Shenanigans – No showings for days or weeks (or none at all), not presenting offers for days or weeks, and the general arrogance and lack of respect by listing agents is very annoying. My job is to shield my buyers from it as much as possible, but they want an answer – but most listing agents would rather play around.
We submitted an offer over the weekend, and are one of 8-9 offers on the table – but the sellers aren’t responding until the end of the week. I told my buyers it is a good thing, because some of the other buyers will quit, or find another property in the meantime!
School District – If one of the main reasons for moving is to get into a better school district, you don’t even want to look at a calendar (BTW, June starts this Saturday!). If you really want and need to be settled by the end of August, you are looking for the panic button right about now.
Too Difficult – If one of the reasons you are moving is so you and/or the kids/pets can have a new place, how long, and how hard do you try? This is where buyer exhaustion comes in – for many people, it’s not worth the difficulty.
Bottom Line – Buyers need to be VERY committed to buying a home today. Having a good agent to assist you with the anxiety is highly recommended!
Jim —- saying, “The inventory is thin because homeowners are keeping their highest-quality properties. doesn’t make a lot of sense. Why would anyone hold back a property whether high or low quality in today’s hot market? If the reason was they expected prices to rise more, then wouldn’t the low-quality real estate holders hesitate to sell as well.
A big part of the reason for the dramatic lack of inventory is the lack of foreclosures. Just recently, 3 of the biggest backs stopped the foreclosure process altogether (again) See: http://www.latimes.com/business/money/la-fi-mo-banks-foreclosure-halt-20130517,0,4350791.story
I personally know people in the San Diego market that haven’t paid their mortgage for well over a year – and the bank doesn’t seem to really care.
The other reason for the lack of inventory is that many homeowners are still underwater with their mortgage. Sure, the recent surge has helped some homeowners – some more than others – but many aren’t there yet. Without appreciable equity in what they have to sell, there’s no impetus to move up.
Prices are certainly up but with such low inventory, a lot of RE agents aren’t all that busy.
What do they call those? A thread-killer?
Not really a thread killer. Kelja is just pointing out all the things everyone has been saying will happen for the last several years. Logically it all makes sense but it’s not how the market is reacting.
Personally I believe the banks + gov have too much control over the economy and are manipulating it to their benefit.