With all signs tilting towards a sellers’ market for the first time in years, it’s helpful for buyers to understand today’s home sellers. Here are three things you should know about today’s sellers.
1. Many homeowners are in a negative equity position.
Twenty-eight percent of homeowners have a mortgage that’s under water today. Many sellers have been hoping for prices to increase just a little bit. Some have outgrown their current home, are forced into a long commute, or simply want to move to a new town. But due to negative equity, they’ve been stuck. With a sellers’ market comes a glimmer of hope. They may be grateful for any offer that allows them to get out at last.
2. Sellers are often buyers, too.
Often, sellers feel the same stress or excitement buyers feel because they’re in the process of buying, too. Though some will become renters after their sale is done, many will jump back in the homeowner game soon after the sale goes though. Sellers, as potential buyers, want to capitalize on today’s low interest rates and home values. Getting the home sold quickly and at today’s value may be all a seller needs to make a purchase. Keep in mind that even though it’s a “sellers market,” most aren’t greedy. They feel the buyer’s pain and just want to get out cleanly and quickly.
3. Sellers are relieved but cautious.
Even the sellers who are above water or own their home outright are well aware of what’s happened in the real estate markets in the past five years. They’ve watched friends and neighbors loose their shirts on real estate. They welcome the news the market is changing in their favor. They’re more hopeful. At the same time, sellers who aren’t stuck in their homes (because of depressed home values or other reasons) are feeling cautious. They’re more likely to take a bird in the hand than risk losing a sale because of greed.
Advice for Buyers
When you’ve found a home you like, figure out who the seller is, how they got there, and why they want to sell. Don’t make assumptions. Put yourself in their shoes.
Sellers aren’t the same as they were around 2005. They’ve just weathered the worst real estate market crash in decades. So don’t go into this market, which is very different from even six months ago, assuming sellers want to take advantage of you. Don’t let your real estate agent convince you that’s the case, either. Sellers may be grateful to receive a reasonable offer, especially if it at least comes close to the value their home had before the crash.