Whether you’re a buyer or a seller in today’s real estate market, one thing’s for sure: you want the best price. If you’re a seller, that means you’re looking for the highest and cleanest offer from potential buyers. And if you’re a buyer, that means you’re looking to pay the lowest price possible. And while these goals may seem strategic at face value, I urge my clients to look deeper – and further into the future – to make sure their decision is the right one. Let’s look at some real-life examples from both the buyer’s and seller’s perspectives.
Buyers: Purchasing today at tomorrow’s prices
After months and months of scrolling through the daily MLS e-mails, you’ve finally found the perfect house in the perfect neighborhood. Upon closer inspection, your agent determines that the asking price is high for recent comparable sales. Still eager to throw your hat in the ring, you make an offer that’s significantly lower than the list price. The seller counters with a number that’s higher than you and your agent are comfortable with. The transaction has reached the inevitable real estate crossroads.
Unwilling to pay more, do you walk away and hope for another home to come along? Perhaps. But it may be worth setting aside the current numbers and looking ahead. Are you planning on staying in this house long-term? Does this house check all of your wish list boxes? If the answers are yes, think of the purchase as a buy-in at tomorrow’s prices; good houses in good neighborhoods are always good investments. And let’s not forget the old maxim, “the best time to buy a house is five years ago”. What’s more regrettable than paying a little more upfront? Nickel-and-diming yourself out of a contract, only to later realize that you passed on a house whose value has appreciated significantly.
Sellers: Looking closely at your larger goals
When you’re selling your home, getting top dollar is the number one objective, right? Well, maybe – and maybe not. Depending upon your unique situation, it’s important to examine your larger real estate goals. Let’s use this example: You’ve decided to upgrade and you’ve found your new dream home that has it all. One house-sized caveat? You need to sell in order to purchase. You list your current home and you receive a low offer on your listing. You’re eager to negotiate, but it’s clear that the buyers aren’t willing to pay your price. Here we are again at those inevitable crossroads.
In this tricky situation, emotions can easily get the best of us. Insulted by such a low offer and confident you’ll find a more eager buyer, you walk away from the table – but is that really the best move? Walking away from this transaction means you could lose your dream home to another buyer. Worse yet, you could discover that the market isn’t supporting your current pricing, which leaves you in your current home – and paying your current mortgage – for months longer than you’d planned. Here, it’s best to define your ultimate goal, which is moving into your dream home. If that means swallowing some real estate pride to achieve that goal, taking the low offer will help get you there. Of course, this isn’t to say that you should simply take any offer presented, but that you should take more than contract terms into consideration when making a decision. Zooming out to look at your bigger ambitions often reveals that a well-timed, lower-than-expected offer is actually the right offer.
Sure, everyone wants to win at the game of real estate. But does that simply come down to the highest price for sellers and the lowest price for buyers? Not necessarily. By determining your larger, longer-term real estate aspirations, you’ll be guided by strategy and objectives rather than dollar signs.