Buyers Beware of Buying the Deal and not the Residence . . .

Posted in Real Estate Bloggers By Julie Jones, Thursday, May 7, 2009.

At the recent Luxury Real Estate conference I attended in Las Vegas many of the top brokers mentioned their concern that some buyers are so motivated by the deal that they are missing purchasing their first choice residence in the pursuit of the best price!

Here in Fort Lauderdale, the appetite for getting “the best deal” is obviously a priority. All good real estate brokers understand this motivation and are looking to obtain the best terms for their client. However, there is a cautionary note to all buyers looking to take advantage of great prices and a wide selection of inventory. Buyers should ensure that they are truly comparing apples with apples, especially in terms of newer construction, hurricane preparedness, elevators, standard of custom finishes, square footage, waterfront footage, etc. Secondly, negotiate on their first choice to the fullest extent. There is nothing more frustrating as a buyer than to finally find their favorite selection, make one offer which is rejected by the seller, and not proceed with negotiations through the counter process.

Buyers may be disappointed that their first or even second offer is rejected. I encourage buyers to keep on negotiating to find a “meeting of the minds” on their first choice residence. Otherwise, they may be disappointed to learn a couple of months down the road that some other lucky buyer secured the price they were ultimately prepared to pay. Negotiating today requires patience and tenacity. Buyers should ensure they work with their broker as a team on this level and be honest in their expectations.

The difference between buyers buying their dream residence, a home they envisage living in for many years that suites their lifestyle, as opposed to just “getting the best deal” may end up amounting to less money in reality! The temptation to buy another residence which is not quite so appealing, just because it is a good deal is great, but act in haste and repent in leisure (and high closing costs to move). Long term, it is important not to have post-purchase regrets just because clients decided not to make that final push on their first choice.

Another common mistake is just to consider short sales. There is an amazing inventory of luxury residences which were purchased before the height of the market and are priced to sell. These sellers have more equity (thus more bargaining power), may offer seller financing and have often beautifully maintained the residence. Please ensure that buyers are not so blinded by the short sale deal that they overlook a good sector of the market.

The serious sellers who are “in the market” as opposed to just “on the market” will negotiate with ready, willing and able buyers to achieve a fabulous deal and purchase a residence that genuinely excites them. I'm curious to hear from both buyers and agents with their experiences and advice on buying the residence and not the deal.

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Submitted by Jim Walberg on May 7, 2009 - 9:46am.

Hi Julie...thanks for keeping to buyer focus on purchasing a home they are excited about instead of getting excited about the deal. The feeding frenzy for "deals" reminds me of the feeding frenzy when it was a sellers market - buy any house you can because you "won" the multiple offer game. Until next time...fair winds!