I was recently talking with a builder who was incensed by the demands of prospective buyers. "They want me to just throw in a furniture package with the deal," he sputtered.
I listened and empathized with his plight. I’ve heard this same frustration voiced by many builders, developers, and new homes sellers in this market. Buyers want ridiculous discount and absurd freebies in order to close the deal. They’ve been handed a market where the buyer dictates and they are feeling choked by the heightened demands.
Let’s take a look at the situation though. The leak in the housing market started to trickle in the first quarter of 2007. Now, 25 months later, the sellers are scurrying to plug that gaping hole in a market that is flooded with short sales and foreclosures. The media, real estate agents, and mortgage companies are telling these buyers that now is a great time to buy. Have you ever heard them advise buyers that it’s not a good time?
As a result of the economic crunch, buyers are making offers that would have been swatted away like a pesky bug just two years ago. But these buyers, while they may appear vulture-like in their approach, are not fools. They resisted the top-of-market buying frenzy, sat on the sidelines to gauge the action, and are now quite enlightened about the status quo of the buyer’s market. They’re ready to play the buying game like a battle to the death. What you call "absurd", these savvy buyers call "realistic."
My advice to you is to be prepared. Know that these crazy offers will come, and that they arise from hopes but not necessarily expectations. Sharpen your negotiating skills and respond to those offers respectfullyâ€”because at least you have an offer to negotiate! Communicate the value of your property and justify the price. Work harder to see where you can cut your margins and where your buyer is willing to bend. A ridiculous offer just means you have to work harder and smarter.