Careful Not to Overplay Your Hand
The market you WANT to house hunt and negotiate in may be vastly different than the market in which you are ACTUALLY shopping. Case in point is our 2020 Northern Virginia real estate market. With so little on the market, and still plenty of buyer demand, the advantage in negotiations goes to the seller. It’s a matter of supply and demand.
That does not mean that buyers can’t find a seller who has pie in the sky dreams expressed in an overly optimistic list price. Any reasonably priced home in a seller’s market will sell. If a home isn’t selling, it is likely overpriced. Buyers may be desperate, but they aren’t stupid. Those sellers, however, are extremely rare and very hard to reason with. Generally, the majority of unreasonable demands is coming from buyers who wish the market were different.
Consider the multiple calls and text messages I got on a listing recently from agents with interested buyers. Their buyers are investors. They have a desire to be shopping in a different market. That means every little outdated feature will be highlighted with far flung, exaggerated statements like, “the kitchen is a gut job” or “that bathroom tile is so old it needs replacement.” It’s exhausting to have conversation after conversation with these agents and try to get them to understand two things:
- The home is priced for the condition it is in. If if it were updated, it would be priced higher.
- Using phrases like “gut job” and stating the “need” for things to be replaced because they are not the current trend is buying into the buyer’s false thinking that the market conditions will be different because they want to update a home.
While an investor may want to overplay their hand and end up without the one townhouse that will come up in their price range in the next two months, that’s their decision. However, there will be a buyer, two or maybe three that will know all too well the market conditions and therefore understand that kitchen and bathroom updates are going to be minimal and well worth it for their future equity and enjoyment. You don’t take away for items not updated if they were already factored into a lower list price.
If you want a home in a seller’s market, hopefully you have hired a buyer’s agent that can accurately run market comps and show you why things are priced they way they are and help you focus on what is most important you. Using bully tactics in an attempt to change market conditions because you are upset you can’t find a better home at a lower price is not a great strategy.
For the record, if you want to know what a true “gut job” would be, consider a home with mold and cabinets falling apart. Outdated is a far cry from a hazard that MUST be addressed. I’ve got pictures saved on my phone of gut jobs to share with buyers who need some perspective.