Yes I’m still alive! Just in case you were wondering. It has been almost 2 weeks since my last post on TrueGotham and the longest streak without a post since this blog’s inception. The lack of time to post blog entries is a function of the new market dynamics that make up today’s very challenging real estate environment. A greater amount of time is being spent on creative marketing strategies, more frequent communication is being demanded by anxious sellers, and more effort is going into creatively structuring deals that would not have been acceptable even six months ago.
Case in point…contingencies have returned to the negotiation process and I’m not only referring to financing. Of course, the desire for a financing contingency abounds in this ultra tight credit market and some are even inquiring about the availability of owner financing. In addition to these obvious changes due to the credit crisis, we are now seeing requests for contingencies on the sales of existing homes once again. Some sellers are actually granting these contingencies as they have no other option but to hope and pray that their prospective purchaser is a successful seller themselves. Then of course there are the all cash buyers who are over-confident and frequently bidding as much as 30% below already adjusted asking prices in an effort to find and take advantage of a desperate seller. So far, I’ve seen no evidence of sellers willing to accept these low-ball bids. That said, these sellers are often amenable to a counter offer which is different from the market of the last decade.
But with all of the anxiety that abounds in today’s market, the greatest challenge for a real estate agent remains pricing. In fact, it has become increasingly more important to not only do an extensive market analysis but to also consider where you believe the market is going short term when suggesting an asking price. Some agents are even developing pricing strategies that price 10% below the 5 or 6 most similar properties on the market. Others are pricing higher in an effort to make buyers feel like they are stealing a place if they get it for 20% or less than the asking price.
Whatever the strategy, navigating today’s real estate market place is not for the faint at heart. Anxiety is high! There are definitely opportunities for qualified buyers and many "real" sellers will still be selling at significant profits. Some won’t.