Now underway is what America’s real estate analysts call the “great normalization” of home-selling markets. Ever so gradually, the profound imbalance between home buyers and home sellers is diminishing. With slightly more properties available, buyers are gaining a tad more bargaining power.
“The super frantic ‘I’ll pay whatever you ask plus a fat premium’ concept is slowly going away. Buyers are more prudent, and multiple bidding is a little less harried,” says Sid Davis, a longtime real estate broker.
A more normal market is what exhausted would-be homeowners have long been seeking. These motivated buyers include families with young children who’ve spent many pandemic-restricted months in cramped rental units.
“Among many buyers, the idea of a three-bedroom house with a yard for the kids and dogs seems like heaven on Earth. But if they possibly can, they really want to avoid ridiculous offers they might regret later,” says Davis, author of “A Survival Guide for Buying a Home.”
Richard Rosa, who heads an 18-broker realty company, says that during the worst of the pandemic in past months, cases of “buyer's remorse” became commonplace.
In the recent past, “some people who are normally very conservative in making financial decisions felt beaten down after being outbid multiple times.” But as the markets begin to normalize, more buyers are now cautious about overbidding.
How can you avoid the sort of buyer's remorse that has afflicted many purchasers in the recent past? Rosa urges buyers to do their neighborhood research before considering any given property.
“Narrow down your search to identify where you truly want to live. Also, itemize all your specific wants and needs. For instance, if you’re teleworking, you might need one home office or maybe even two,” says Rosa, president-elect of the National Association of Exclusive Buyer Agents (naeba.org).
Here are a few other pointers for buyers:
-- Attempt to keep your emotions in check when crafting a bid.
Eric Tyson, a personal finance expert and co-author of “Home Buying for Dummies,” suggests buyers set a ceiling on how much they’re willing to pay for a property before making an opening bid. This is especially important if one partner in a couple is likely to get carried away by a “must have” house they come across.
“The same people who bid too much in Las Vegas could be inclined to bid too much for a house because of their competitive nature. Remember that sometimes the winner of an auction winds up the loser,” Tyson says.
-- Seek information from neighbors in an area you’ve targeted.
Your agent should be helpful in sorting through property listings, making sure you identify the most promising homes available.
But once you have your eye on a particular place, it could be the time to talk to those who know the community best: neighbors.
“Believe me, most neighbors will bend your ear about their neighborhood. For example, they’ll tell you if they like or hate the local schools and the ages of kids who live in nearby homes,” Tyson says.
-- Visit enough properties to make an informed comparison.
Even if the first place you see looks perfect, you’ll want to ponder alternatives to make sure you have a basis of comparison, says Tyson, who recommends home shoppers look at a minimum of six properties before they buy.
“Buyer’s remorse is much less likely if you’ve examined several options -- even if you must do so in a single day,” he says.
-- Educate yourself on local property values.
If you’re uneasy about the price tag attached to a property you like, have your real estate agent show you several comparable homes that are also on the market, including those under contract, Tyson says.
Resourceful buyers might even go a step further by asking people who’ve recently bought into the neighborhood whether they would mind giving them a peek inside.
“Drop a little note in their mailbox telling them you’re interested in the neighborhood and leave your names and phone number in case they’ll let you come by,” Tyson says.
What’s the advantage of evaluating the price and quality of freshly sold homes? In areas where home prices are rising, the latest sales are the most telling, more so than transactions that occurred months ago.
-- Avoid waiving your home inspection if at all possible.
Almost without exception, buyers are legally entitled to an inspection of a property once their offer is accepted by its sellers. But in popular neighborhoods, some buyers continue to waive this right, believing their bid will be more appealing to the sellers if they do so.
Tyson says he understands why some buyers voluntarily give up the right to an inspection, particularly if they’re trying to purchase a home in a strong sellers’ market. Still, he argues that an inspection could expose unseen defects -- such as an air conditioning problem that may not be apparent until after the move.
“No matter how hot the market, I would never advise buyers to forgo an inspection. If, for competitive reasons, you don’t want to have this right in your contract offer, at least you should ask the owners for the chance to do an inspection before you make a bid,” Tyson says.
(To contact Ellen James Martin, email her at firstname.lastname@example.org.)