When you are a buyer, it’s natural to want to make the best deal you can. And sometimes the economic climate is such that buyers know when their moment is upon them. But not every situation is the same.
Some buyers move quickly, but others play the waiting game and end up losing out. Here’s what real estate agents should know about this kind of buyer and how you can help keep them informed and, hopefully, regret-free.
The timing-obsessed buyer
Those who bought in 2009 and 2010 made great investments, which have appreciated very substantially in value over the past decade.
But indicators rarely present as clearly as they did in the years right after the recession. In today’s market, no one knows what is coming next. The economy seems strong, and unemployment has hit record lows. But the populace as a whole remains unsettled and uncertain as to what will happen next.
Buyers are coming back into the market as they see prices decline, but they cannot tell when to bid. They ask questions like:
- “I know this is a buyer’s market, but when will be the best time to buy?”
- “Do you think the market is going lower?”
- “Maybe I should wait three months and see if I can pick this up for 5 percent or 10 percent less.”
One thing my (almost) 40 years in the brokerage business has taught me — you only see the bottom of any market in the rearview mirror.
The frustrated buyer starts here
Each month, we see increasing numbers of sellers get in line with market realities. As that occurs, those properties attract more interest and begin to go into contract. And as that happens, we begin to see frustration emerge in the eyes of the buyers who have waited too long, who were sure that the market for this property (whatever it might be) had lower to go.
After a certain point, trying to time the market can leave a buyer exposed and disappointed.
For years, I have listened to buyers tell me that they plan to wait, that the market will surely drop within the next six to 12 months (a disproportionate number of these buyers, I have to admit, are investment bankers.)
Frequently, these buyers end up priced out or buying near the top because they have waited so long. Honestly no one ever knows when the peak occurs, nor do they know when the nadir occurs. As either a buyer or a seller, you just have to hope to be more or less on the right side of history.
How agents can help
This environment presents both an opportunity and a challenge for agents. Because of our reputation in the world as “aggressive,” agents must always be careful not to push buyers too hard.
That said, moments like this one do create real buyer opportunities. By presenting buyers with current opportunities and historical data demonstrating the value in today’s marketplace compared to that of a few years ago, we can help them understand the value that current market conditions can offer them.
Properties across Manhattan are trading at prices we have not seen for years. Savvy buyers don’t outsmart themselves — they recognize value, and they negotiate toward it. Buyer opportunity abounds in this current environment where price reductions are a daily across-the-board occurrence and many asking prices remain negotiable.
But there is always some danger in waiting too long or pushing a price negotiation too hard. Because sometimes, timing isn’t everything. Help your buyers understand that, and perhaps they’ll close more and lose less.
A graduate of Yale College with a Masters Degree from CUNY, Frederick Warburg Peters entered the real estate business as a residential agent in 1980. After working as a Sales Director at Albert B. Ashforth for a number of years, he acquired and renamed the 95-year old firm in 1991. Since that time, he has expanded the company from 40 to 130 agents and from one to three locations.