Many real estate agents have seen increasing numbers of prospective buyers repeating what has become a familiar pattern. In the current slower market, buyers hesitate to make a purchase decision even when their search criteria have almost all been met by a property they have viewed. This reluctance has served well from one point of view. Clearly prices have not been in an uptrend for quite awhile even in relatively stronger market areas such as the Westside of Los Angeles. However, many prospective buyers may look back with regret if they are not prepared to make offers when a home meets their needs.
It has long been noticed in real estate as well as other financial arenas that no one “rings a bell” at the bottom of the market. In some neighborhoods, the bottom may already be occurring, despite the overall general news and market statistics. In fact, it is not uncommon for there to be multiple offers in some of the more desirable areas when a home is priced very competitively. An example recently occurred in Pacific Palisades with a new home that had been on the market for several months. The seller finally decided to adjust the asking price by approximately 10% with the intent to make it extremely attractive to buyers so that at least one of the prospective buyers with a “wait-and-see” attitude might be incentivized to present an offer. Within a few days three different buyers wrote purchase offers, and within the week it was sold at a higher price than the reduced price point. One of the unsuccessful buyers was very sorry they lost out because they waited too long to decide. This put them in the middle of a bidding war that they lost in the end. During the two-week contingency period they even offered to increase the price.
Many buyers seem to feel that no homes are well-priced today, and eventually can be purchased for lower prices. While this may generally be true of some listings, those which are well-priced to begin with reflecting the current market value are sold rather quickly even in this slower market. Moreover, decisive buyers usually do not regret negotiating the best terms on purchasing a home that meets most of their criteria. Four clients of ours recently thanked us for encouraging them to move forward rather than continuing on the sidelines in the hopes that even better opportunities might show up. They also benefitted from their timely decision because of the current relatively lower cost loans still available.
No one has an infallible crystal ball to know when the best timing for a purchase will be. However, unless someone intends on selling within a few years, odds are that they may look back and feel good about having bought sooner rather than later.
For the past 22 years Michael Edlen has provided real estate counseling services to prospective buyers and sellers. Most of his business is derived from a referral base of over 900 past clients. More tips and information are available on MichaelEdlen.com. He can be reached at 310.230.7373 or Michael@MichaelEdlen.com.