…and how to solve them. Social media users weigh in on things they wish had gone better during their home buying experience.
Over the past few weeks, I took to social media and forums to research for some recent complaints about the home buying process. Anything was fair game, including the market, their agent, or how the process could be better in general. Here’s what I found:
1. There’s Nothing For Sale
The largest resounding answer was that there’s “nothing for sale”. I can testify that my buyer clients are feeling this pain. It’s common to talk to somebody buying a home right now who’s getting frustrated that there are so few options for them, and multiple bidders for every home they do find.
Right now, national and local housing inventory is the lowest it’s ever been since the data has been tracked. Ever. For example, in Plymouth, Michigan (a city that falls in my personal market area), there were just 75 active homes on the market out of 13,195 in the city and township last month. The average for the last 10 years has been 121 for any given month.
We use “months of inventory” (MOI) to measure demand, as well as whether we are in a buyer, seller, or neutral market. MOI simply means “based on how quickly homes are selling, here’s s how long it will take to sell everything currently for sale”. In Plymouth again, MOI was only 1.74 last month. Compare that to 3.66 months, which has been the average over the last 10 years. For perspective, MOI needs to be higher than 6 to be considered a buyer’s market.
Until more people decide to sell their home, this will likely be a hurdle buyers continue to face going into 2021. Just stay diligent and make sure you’re looking daily at the new listings in your area.
2. Not Feeling Prepared For The Process
A Facebook friend of mine said “Both times I found myself overwhelmed with all the moving parts. I wish we were provided with a checklist and timeline. What would be expected of us and when. Instead, we got one thing done then would get an email saying ‘ok now we need this from you asap’ then another email after ‘ok now schedule this within 3 days’.”
In the 7 years I’ve been a full time realtor, I’ve found that the majority of my first time clients are shocked at how much time and due diligence is required to buy a home. We live in a world where we can buy virtually anything within seconds and have it delivered to us in a day, so buying a home is a stark contrast to that.
Because of this, the easiest way to feel prepared is by having a thorough home buying consultation with an experienced realtor. It will the best hour you can invest. Think of it like learning to swim before you jump in the ocean. You’ll go from feeling overwhelmed with all of the moving pieces and timelines, to easily scheduling out exactly what it expected of you.
Researching online is a great first step, but it pales in comparison to having all of the information laid out for you at once by a professional who’s in your market 7 days a week. The process varies by country, region, state, city, and sometimes even neighborhood; the transaction wisdom of somebody in Baltimore is often going to be very different from somebody in Phoenix, L.A., or Detroit.
3. Not Spending Enough Time On Inspections
A Facebook friend wrote: “An old realtor we had for our first house was driving the show too much, rushing the process through without doing things in our best interest. There were some big red flags in our inspection for our first house that she breezed over and said they were nothing. We unfortunately trusted her, costing us $10k when we went to go sell 4 years later.”
This testimony is unfortunate, and happens to some first timers who are working with an inexperienced or unethical real estate agent/home inspector. There are a few ways to avoid this dilema:
First, pick a realtor you trust. Making sure that you trust the person representing you, as well as knowing that they have (or are working with a mentor who has) experience navigating home inspections will save you thousands.
Second, research your home inspector. The same logic to hiring your realtor applies to your home inspector. Making sure your inspector is thorough and working in your best interest will save you thousands in the long run.
Third, know what inspections are available to you. Did you know you can have a radon test? What about a sewer scope? A pest inspection? Well water test or septic inspection? Some of these additional inspections are separate from what a normal home inspector covers, so make sure you understand what is being covered by who and who you have to call to do your due diligence.
Finally, talk to contractors and specialists for prices and opinions. While it may seem easier to ask your inspector, realtor, friends, family, or Google how much the repair might cost, your best bet is to call a few local companies who specialize in repairing the issue you’re concerned about. This will give you a realistic idea of the scope of the repair, as well as a real number to use as a negotiating tool. A seller is much more likely to accept a quote from a contractor than they are from someone else.
4. Bidding Wars/High Prices
I can’t count how many people I read the testimonies of who were upset about paying $X above the asking price, waiving appraisals, covering closing fees for the seller, etc. and still losing the home to another buyer who was willing to give more. This is absolutely true for even a few of my own personal clients.
The market being a strong sellers market has been established, so what do you do if you continue to lose out on homes?
First, explore offer strategies to use during bidding wars. There are a few ways to make your offer stand out that go beyond just offering the highest price. Maybe offer free occupancy, an appraisal guarantee, agree to take on up to $X in repairs from your home inspection preemptively, etc.
If you’ve tried some of these, but are still just getting beat by people with larger budgets and more to lose, then follow the path of my client who just closed on her new condo this week: buy an overpriced fixer-upper. Despite how hot the market is, there are still a handful properties out there that aren’t selling because they’re priced too high for their condition. If you’re the only buyer who is interested and the property has been on the market for more than a few weeks, you may be able to negotiate the price down to market value and fix it up the way you like.
Understandably, most modern buyers prefer buying a move-in ready home. There is definitely opportunity to be had by breaking from the pack. My wife and I bought a fixer-upper in our ideal location a few years ago, and I can say that despite the long days of working on the property and collaborating with multiple contractors, the home really feels like home now. Just something to consider if you’re tired of missing out on homes you love.
Hope you have a great day today, and hope you found something useful from this post!