Buyer's Fatigue ~ Dan Tovar ~ 6/29/2021
I thought I would just reach out to you and send out another video. Recently in the last couple of days, we've actually had some buyer's conversations that have been very similar. And the topic we are going to talk about is buyer's fatigue.
Now, if you've been following the real estate industry as far as things that have been going on, it is definitely a seller's market. Homes are selling anywhere between 24 to 48 hours and ranging anywhere between $20,000, almost $100,000 dollars over the appraised value. Pretty crazy! Really great for the sellers. Really, really awesome they're able to be able to benefit the equity as much as they can. But on the flip side of that coin, we have buyer's fatigue.
An explanation of buyer's fatigue is just a little explanation of the scenario that buyers are going through right now. Basically, going through a whirlwind of emotions and letdowns because they're blasting out several offers. Pre 18 months ago, we typically had a buyer, and once they're qualified, it would usually take us about 30 to 45 days, and possibly write one to two offers. And we would typically get them into a home. Unless it was special circumstances that the buyer was looking for something a little bit more specific, it would rarely, rarely be over 45 days. In today's market, it is taking anywhere between 45 days and 90 days for a buyer to be able to get into a home. And that is actually a very well-qualified buyer. Not only the buyer is able to come in with their down payment and closing costs, but now they need the money which is referred to as the appraisal gap. What we are having to do is actually show quite a bit more homes, ranging anywhere between 50 to 60 homes. And we are having to make multiple offers, anywhere between five to 15 offers within a month to a month and a half time frame.
A lot of buyers are getting very frustrated, having a lot of anxiety, and stressing out, getting upset because they are not getting their offers accepted. Well, unfortunately, that is just the market we're going with right now. And right now, the average buyer is actually competing against 25 to 30 other buyers for one particular house. The inventory is ridiculously low, and the demand is ridiculously high.
What we're going to talk about today is be able to find out three different ways how you could be able to combat buyer's fatigue. First of all, you have to understand, you have to realize, and you have to acknowledge what is your why.
Everybody is not the same. One size does not fit all. We all have different types of reasons why we are purchasing a house, why we're up-sizing, why we're downsizing, why we're relocating, whatever. Every buyer is unique. What we have to understand, and we have to explain to our buyers is, go back to your why. Why are you purchasing a home? That is going to be able to help you get past the frustrating points, as well as the anxious parts, and very upsetting parts, and the frustrating exhaustion of making any offers, looking at properties, and getting your hopes up. It is a very, very emotional roller coaster. When you have a focus and foundation of why you are looking to purchase a house, that can help you push through the environment of what we are dealing with in the real estate market. To find out you are why first and always make sure that you can go back to the why when that gets really tough and be able to get your offer accepted.
Second, you need to embrace reality. It is what it is, and you need to deal with it. Unfortunately, you must acknowledge that we are in a seller's market, and we are competing against one out of 30 buyers that were on the table. So not only are you going to love the property, well, 30 other people are going to love the same property. So, you must go in as strong as you can, and you have to make your best offer first. Because in this market, less than 10% of the time, we get a response or even a counter from the seller's agent or the seller. You want to be able to put all your apples together and be able to find out what you truly have and acknowledge and face of what today's buying environment is.
Third, you must be able to prepare and present the best offer possible. And that is just not writing a letter to the seller. If it's one buyer out of multiple, guess what, you have to be able to put your best foot forward. And when I say that, you have to be able to make sure all your ducks in a row, which meaning that your lender has to properly qualify you, which means that he has to run all your information, or she has to run all your information, pull your W2's, paycheck stubs, whatever they need to do to put a proper desktop underwritten approval, as well as approval. And you have to show the funds you're available to be able to make the offer.
Not only writing the purchase contract correctly, but you also have to support the contract and be able to validify it with its strength by supplying the right documents to be able to present the best offer possible.
I know it's a lot. I know it's definitely a challenging market, but if you're able to focus on those three things, then definitely it will improve your odds to be able to give you the best-case scenario to be able to get your offer accepted.
All in all, a quick review, make sure that you have to establish your why, you want to definitely be able to understand and comprehend reality and acknowledge what's going on today, and embrace it and deal with it. And number three, you got to make sure that you are properly qualified, to make sure that you present your best offer as possible, and have your realtor and lender be able to advise you the best way to make the best offer you can be possible to be able to make your odds best to be in your favor.