Our assistant Brittnie is a licensed realtor, and for months she has been working with a couple in search of the right entry-level home. Buyers at the low-end of every market have had no negotiating power for the last ten years, but some of the softness in our soft landing can be attributed to pilot error – the listing agents are still (too) cocky.
They made an offer that was 8% below the list price on a home that had been on the market for 3 months with no price adjustment. It was easy to figure out why it wasn’t selling – it hadn’t been remodeled (the type of homes that might have gotten lucky before, but now are struggling to sell).
The sellers counter back at 2% under list, and the agent tells Brittnie on the phone, “Don’t even think about countering the price”.
But that’s not all.
He also included the usual terms left over from the high-flying days:
1. Sold as-is, no repairs.
2. No termite.
3. No home warranty.
The buyers walked.
Previously, all buyers who were frustrated enough by bidding-war losses and rapidly-rising prices would succumb to the demands of the listing agent just to get it over with.
And it’s not just the terms, it is the attitude of the listing agents that is a turn-off too. Buyers aren’t going to put up with it when they see houses languishing on the market these days.
Another favorite is for listing agents to crank down the contingency period from 17 to 10 days. I had one do that to me yesterday on a house that we already confirmed had no permits on record at the city (it’s an older house).
I asked him if he was going to cancel the deal if we didn’t release contingencies after 10 days. His answer? “Hmm, well, I don’t know.”
Is it worth it to put the screws to the buyer in the middle of November on a house with no permits just so you have the option to go back on the market around Thanksgiving?
If the market sluggishness continues, some of it will be self-inflicted.
Get Good Help!
No termite? Warn the neighbors. Is that even legal?
You can close a sale without a termite clearance – as long as it’s not in the agreement. But if a listing agent is going to stick it to the buyers, wouldn’t it be prudent to have completed a termite report so they know how much it is?
To expect a buyer to sign off on an open-ended ticket is lazy and asking for trouble, which is what he got.
I took that as meaning no termite inspection would be allowed. That just didn’t seem right.
The common thread among all these listing agents is lazy. Buyers can do all the inspections they want, as long as the LA doesn’t have to get off the couch.
Oh, you want repairs? The answer is NO, and the only retort for buyers is to cancel. Don’t be surprised if we see more escrows falling out.