Some home buyers are convinced that if they just keep looking, they’ll uncover value in the marketplace. They don’t realize that after a while–a month, even just a week-end–they’ll be looking at the same homes with different addresses.
Because the reality is that home pricing is efficient: a home in a certain neighborhood with four bedrooms, two baths and recent updating is going to sell for about X. There won’t be a significant variation in sales price among similar homes from month to month unless the market changes.
Home buyers should also understand that if they love love love a house, most of their competition will also love love love the house. Because let me tell ya folks, virtually all of you are looking for the same house. That competition maintains consistent home values, unless, again, the market changes.
Home buyers should also understand that this is one instance where a strong work ethic doesn’t do anything for them. The real estate market doesn’t care that they spend every week-end looking at open houses. The real estate gods don’t reward this behavior.
But what home buyers should really understand is that the real estate market is not a garage sale: there are no hidden gems, just waiting to get snapped up at a bargain because only you know about them and only you recognize their value.
Why? Well, there’s this marketing machine called the Internet–you may have heard of it, you may even make your living from it–which lets everyone know 1) the house is available, 2) where it is and 3) how wonderful it looks in photos.
Then there’s a list price that makes buyers want to break down the front door. Then there’s the open houses (and agent lock boxes) so they don’t have to.
Then there’s the waiting period of a week or two so that the seller can verify the home’s market value by offering it up for competitive bidding: the “offer date” prevents one particularly aggressive buyer from stealing the house with a below-market offer the day it comes on the market. It doesn’t, however, prevent one particularly aggressive buyer from making a home-run offer the day the home comes on the market.
Yes, friends, extensive market exposure (how many listing websites are there? a zillion?) and plenty o’ competition (how many people do you see at open houses?) mean that pricing for a particular type of house in a particular neighborhood is going to be relatively consistent. Which means that the house you like, in the neighborhood you like, is going to cost pretty much the same, whether you see it on your first week-end of open houses, or your fiftieth. You will not wear down the market–on the contrary.
Put another way, if nothing in your price range excites you today, it’s unlikely that anything in your price range will ever excite you.
Unless the market changes.
copyright © John Fyten 2015