Selling and Buying in a Down Market
June 5th 2008 18:20
I mentioned this in an earlier post, but this is a down real estate market so sellers beware, your buyers have all of the advantages right now. Since I just sold one house and bought another in the past month, I have had some interesting experiences.
First, I discovered that my home was worth less now than it was a year ago. While on paper, I made a 15% profit on the house that I had owned for just over three years, it was still worth about $25,000 less than the prior year. In theory, I lost money, but when I looked at things objectively, I had to admit that I still made money in a down market. I was lucky (I’d like to say smart as well) and priced my house strategically. We had our first offer in 10-days. The next week was difficult as we negotiated with the buyer. They were very difficult and I came down in price a lot. After we negotiated the deal (after two weeks on the market) we got a second offer. The second buyer wanted to buy my house for even less, we said no.
During the inspection, I was nervous. After difficult as they were during the sale, I thought for sure we would get screwed during the inspection and they would ask for absolutely ridiculous things. In fact, I have heard of buyers asking for tens of thousands of dollars worth of repairs. Fortunately, that didn’t happen and we sold the house. Others in my neighborhood were not so lucky. They thought they couldn’t afford to take less, now they are asking less than were I started and will probably get a lot less than they wanted. It’s not their fault; it’s just a bad market.
I learned my less from this buyer and when I negotiated for my new house, I got a great deal. My realtor wasn’t happy with me. I started lower than she thought was reasonable, but I knew how difficult it is to sell in this market and many sellers are happy to take what they can get. I bought smart, negotiated a great deal, and got into a neighborhood I would not have been able to afford last year.
There are some advantages to buying and selling in this market but you have to be prepared to deal with the ups and downs. I know that I was lucky in selling my house so quickly. If my home was still sitting on the market, I would probably be looking at getting it sold for $20,000 less than I did get. Until prices stabilize, there are no other options for those that want to sell. You have to work with the buyers you get and hope that aren’t completely unreasonable. As mad as I was about the price I sold my house for, I’m quite grateful now. This is especially true since I realized I could have ended up with a much lower offer if I had passed on that buyer and waited.
First, I discovered that my home was worth less now than it was a year ago. While on paper, I made a 15% profit on the house that I had owned for just over three years, it was still worth about $25,000 less than the prior year. In theory, I lost money, but when I looked at things objectively, I had to admit that I still made money in a down market. I was lucky (I’d like to say smart as well) and priced my house strategically. We had our first offer in 10-days. The next week was difficult as we negotiated with the buyer. They were very difficult and I came down in price a lot. After we negotiated the deal (after two weeks on the market) we got a second offer. The second buyer wanted to buy my house for even less, we said no.
During the inspection, I was nervous. After difficult as they were during the sale, I thought for sure we would get screwed during the inspection and they would ask for absolutely ridiculous things. In fact, I have heard of buyers asking for tens of thousands of dollars worth of repairs. Fortunately, that didn’t happen and we sold the house. Others in my neighborhood were not so lucky. They thought they couldn’t afford to take less, now they are asking less than were I started and will probably get a lot less than they wanted. It’s not their fault; it’s just a bad market.
I learned my less from this buyer and when I negotiated for my new house, I got a great deal. My realtor wasn’t happy with me. I started lower than she thought was reasonable, but I knew how difficult it is to sell in this market and many sellers are happy to take what they can get. I bought smart, negotiated a great deal, and got into a neighborhood I would not have been able to afford last year.
There are some advantages to buying and selling in this market but you have to be prepared to deal with the ups and downs. I know that I was lucky in selling my house so quickly. If my home was still sitting on the market, I would probably be looking at getting it sold for $20,000 less than I did get. Until prices stabilize, there are no other options for those that want to sell. You have to work with the buyers you get and hope that aren’t completely unreasonable. As mad as I was about the price I sold my house for, I’m quite grateful now. This is especially true since I realized I could have ended up with a much lower offer if I had passed on that buyer and waited.
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