Three Reasons Buyers Miss Out on Good Deals
- They haven’t done enough homework to recognize a good deal. If you’re shopping for a house in a specific neighborhood, but have no idea that the average sale price is, say, $135 p/sq.ft., how do you know that you should jump on a new listing priced at $120 p/sq.ft. (assuming it’s in average shape)? Good deals get snatched up in no time, so it’s important to have enough knowledge to feel confident in moving quickly. Often, buyers don’t have time to get to know the details of the area where they are shopping. In those instances, it’s particularly important to engage a knowledgeable exclusive buyers’ agent who can help you identify the good deals.
- They want an even better deal. Why is it if gas is selling for $3.75 a gallon and one station starts selling it for $3.63 a gallon, nearly everyone will think that’s a heck of deal. No one will ask if the station with the lower price will consider taking $3.59 a gallon. Instead, people will drive across town and call their friends to let them know they, too, can save 12 cents a gallon or $1.80 when filling up a 15 gallon tank. Yet, when a house is priced 10% below what similar houses are selling for, buyers think it’s savvy to try to negotiate the price even further? Yes, that may have worked when the market was in a deep recession and buyers were few and far between. Today, that strategy will leave you regretting that you lost out on the opportunity to get into a $200,000 home with $20,000 in equity!
- They get caught up in the details and lose sight of the big picture. For example, one exclusive buyers’ agent negotiated a price of $365,000 for a home in a neighborhood where a very similar property had sold for $402,000 just a few months before. (The agent had learned the seller was desperate to sell and used that leverage to get the low price.) During the home inspections, it became apparent the air conditioning system wasn’t working and needed replacement. A new system was quoted at $4,500. The buyer argued that even though he loved the property, a $365,000 home should have a working air conditioning system. The seller was already taking a financial beating and refused to do the repairs. The buyer was adamant and told his agent he wanted out of the deal. The agent pointed out that even with the additional expense, the buyers’ cost would be $369,500 for a house valued at $402,000 and asked the buyer to think about it overnight before terminating the contract. The cynic would say, “Yeah, the agent just wanted the deal to close.” But, it doesn’t take much real estate savvy to see the buyer almost walked away from $30,000 in instant equity and would be returning to the market where any other house priced at $369,500 would seem like a compromise.