What's Going On?
During a recent showing of a 7-acre property, I noticed something strange. Even though 99% of the generous lot had already been cleared — unlike many of the neighbors’ properties — the customers were fixated on the remaining 1%, which was off limits because of nearby wetlands. They spent most of our visit overlooking the rest of the property and asking, in every possible way, if they could clear this small portion.
I would consider this the type of isolated incident that happens here and there and think no more of it, but I’ve noticed (and confirmed with my colleagues) that there’s something in the air recently. People are not at their best. It’s like enough is not quite enough.
Here’s another example: Typically, homes are sold unfurnished, but it’s common for sellers who don’t need a homes’ contents to sell them, via an estate sale, either just before closing or to the new owners. In a recent transaction, the purchasers offered to let the sellers leave the house fully furnished, to take the contents off their hands. They weren’t paying for the furniture, mind you — they were just taking whatever the sellers left.
The sellers noted along the way that their children wanted some items, nothing of consequence ... and I’m sure you can guess what happened. Yup: The contents of a fully furnished house worth upward of tens of thousands of dollars was essentially gifted, and all the new owners could focus on was a few hundred dollars’ worth of missing doodads (if that much). They asked for compensation.
Bidding wars are especially thorny
Another place we’re seeing this pattern is in bidding wars.
A bidding war sounds great for a seller, but that’s not always the case. Often the winning bidders pay more than the asking price, meaning sellers realize more than they anticipated. You would think that extra bit would be a benefit, yet some sellers point out that they did not actually realize the full difference because closing costs and gains tax were higher than originally calculated. They still aren’t happy.
Recently, I saw a bidding war happen for a house that had spent only a few days on the market and held a jam-packed open house. The owners entertained a dozen offers, more than half above the asking price. And while they did pick an offer, everyone was unsatisfied. The winning bidder thinks they overpaid, and the seller thinks they listed too low. Some of the other bidders think they were treated unfairly, and some have stopped working with long-time and previously trusted agents who didn’t help them to secure the winning bid.
What’s going on?
My colleagues will agree such scenarios are not new, just more common recently. In part this is because there have been so many more transactions, and in part because so many of us are especially stressed. Our collective lives changed suddenly; we’re living through unfamiliar times with no end in sight. While there are many reasons why real estate transactions are complicated these days, I will mention just one: motivations to buy and sell have not necessarily occurred naturally.
Many homeowners accelerate plans to sell because they want to get in before prices decline and/or because of pressure from agents touting make-you-sell values. On the flip side, would-be buyers think they should wait for prices to soften and yet are afraid nothing will be left to purchase, or are feeling social pressure to act now. On both sides, people are moving faster than then they ordinarily would.
Why so much dissonance? Maybe because buying or selling real estate is a kind of taking control and in these trying times, so many of us feel out of control. But, like most things done too soon or without sufficient planning, it does not address the root cause. The result, whether it is more money in the bank or a new home, doesn’t eliminate the fact that we’re still living in stressful times, made more stressful by blindly jumping into a major, life-altering transaction. Feeling out of control adds to the stress and, well, no one is at their best in such circumstances.
It’s not a bad time to buy or sell — for the right reasons
Please don’t misunderstand. I am not suggesting buying or selling now is a bad decision. It may be the best time for you, and a wise thing to do.
But before you start the process, be sure you and all the stakeholders are on board and that you all agree it’s a sound plan. All too often, I see decisions based on highly personal selections of available facts. These days, it’s not only real estate where we are apt to pick and choose data points to suit our preferences, rather than approach situations with an open mind. And it’s to our detriment.
While “taking control” in the form of buying or selling real estate might create short term comfort at best, at worst, the result is remorse and nearly always uncertainty.