The market is so tough right now…
Tensions are high right now…deals are really tough to come by and even harder to keep together…
I have had more escrows either fall apart or almost fall apart in the last 4 months than all other deals in the last 24 months. The common trends I have seen are:
- Sellers are slow to accept the reality of the market and pricing and the buyers are just not motivated so they go into transactions half-heartedly and the littlest things make them waffle or cancel the transaction. Don’t get me wrong, there are always times where major things happen but that’s not as often as you think. When buyers are half-hearted, they take their time and don’t care as much about the timing of the transaction and this drives sellers crazy! Most sellers understand buyers have their right to do their due diligence, but when they take a lot of extra time or cause un-needed delays, this can really cause issues in the transaction. This literally is a bigger issue than negotiating repairs or credits…the amount of time it takes to get to that point has been a common issue amongst buyers.
- Sellers are concerned that they are off the market and potentially missing out on a more realistic/motivated buyer, and they feel trapped. Buyers just want to make sure they know the exact condition of the property and that the bank has them fully approved before they fully commit to the transaction by removing contingencies. There’s nothing wrong with what the buyer wants to accomplish, it’s just supposed to be done in a specific amount of time, and when those time periods are dramatically exceeded it causes huge issues.
I have been on both sides of this situation lately and its stressful. It’s not enjoyable, but it’s the climate we are in right now. All I can do is set my client’s expectations and do my best to keep things on track and as calm as possible.
- One interesting trend in this market is the most qualified buyers seem to be the least motivated, (i.e. all cash buyers or highly qualified buyers), and with a slowdown in the market, prices dropping on some level, and a lack of motivation like I said, this has opened the door for the “trade-up-buyer”. More specifically, the buyer that has a house to sell in order to buy… the dreaded “contingent buyer”…haha. This would not have been even possible in a hotter market, but with all these factors we are seeing more and more offers getting accepted by sellers that are contingent on the buyer’s house selling. So, as a product of those deals getting accepted, we are seeing more houses come on the market which is slightly raising the inventory level. If the clients with a house to sell are smart and negotiate properly, then they are listing these houses they “have to sell” at attractive prices so that it will sell fast and allow them to complete the purchase of their “up-leg” property. All of this keeps the market moving!
