How can you tell if it’s a buyer’s market or a seller’s market?

 

By asking, “Who is acting cuckoo?”

 

And right now, buyers are really enjoying their turn in the driver's seat.

 

I mean, it’s fine, they’ve waited long enough. We all remember when sellers were the crazy ones.

 

Seller in 2022: “You may have this garbage can house if you take it non-contingent, a million over asking… and we’d like to remain here, for free, while you pay the mortgage and insurance, for 90 days, so that we can take our sweet, sweet time moving out.”

 

And buyers said, “Sure.” Because they had to to get the house. Literally, any house.

 

 

Well, now buyers have the upper hand for the first time in 15 years, and they’re starting to flex their muscles.

 

We are seeing this in two ways. First, they are taking their time with offers (weeks, months!), and once they finally write an offer, they often start well under the asking price. This is normal.

 

But then the real pain begins. After inspections, we are seeing absolutely insane “requests for repairs.”

 

For those of you who haven’t been through this yet, an accepted offer is just step one in a real estate deal. Buyers then conduct inspections, up to a dozen, which used to be simple but can now take weeks after 10+ inspections.

 

Buyers then use those inspections to beat the seller over the head, and get them to reduce the price and/or give “credits” in escrow for the work needed for the home (gutters, sewer, foundation… chipped paint).

 

 

Sellers: how do you mitigate against a six-figure repair request? Well, for one, if you've taken care of your home, and addressed the items in the inspection reports you received when you purchased the house, that certainly helps.

 

But if you bought a house that needed a new roof, and you did nothing, well… you're either going to pay during your ownership, or pay as a concession in escrow. Buyers aren't so keen to pay top dollar at 7% interest to have a house with leaks the second they move in.

 

The other way to mitigate against credits is leverage. What is leverage? Backup offers.

 

When there are other buyers lying in wait, buyers tend to be more reasonable about concessions. They want the house, because there is FOMO, so they'll deal with plumbing later.

 

 

Don't overprice your house. Pricing aspirationally will always land you a lower price, especially in this market.

 

On well-priced houses, with flat yards and three bedrooms upstairs and no work needed, etc., it’s still the good old days for sellers. Our agent chat is full of house links followed by “☝️ this has 14 offers, are you f*n kidding me?”

 

But if you price at the price the Seller wants versus at the price that is below market comps… that's a big risk. Because the longer a house sits on the market with no offers, the lower the value to the buyer. Days on Market is the price killer.

 

 

The best outcome you'll get on price, and in negotiations, is selling your house in the first two weeks. 

 

Overpricing, you get punched twice. Once in the offer phase (landing below the List Price, all while paying for your mortgage & staging while the home sat on the market), then again in the inspection phase (this is where those six-figure requests roll in).

 

So Sellers, price your house well for the love of god.

 

And Buyers, get your crazy on, fine! But don't talk yourself out of a house you love because you have every single piece of information you could ever have about the property. As I tell my clients, they're all fixers. And remember, someone lives there now.

 

Keep calm, carry on, and get your house.