A Word To Buyers And Sellers...You Can't Make It On Both Ends

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Real Estate Agent with Assoc. Broker/Broker ABR, SFR, e-Pro, @Homes Realty Group, Huntsville AL

A Word To Buyers And Sellers...You Can't Make It On Both Ends

A Word To Buyers And Sellers...You Can't Make It On Both Ends...sometimes the obvious needs to be pointed out to those standing too close to the forest.  It doesn't matter the condition of the market, you simply can't make money on both ends. 

In a balanced or trending up housing market sellers expect to make a profit or fair return on their largest investment...their home.  In a sellers market demand is high and inventory is low in turn raising overall home prices and the seller can expect to do well as the buyer will be paying the higher price that competition for fewer available properties brings.  There is less motivation for a seller to jump at lower offers, homes in need of cosmetic sprucing up or updating sell much easier with the buyers willing to do or pay for that work to be done.  In a sellers market, buyers are less likely to ask for more closing costs be paid by the seller.  So in this scenario the seller will get more money for his home and as sellers this is what we want...to sell higher than we paid. However, we will in turn pay more money for the next home, so on the buying end we're not doing as well...unless moving out of area or state where housing is less expensive. 

In a market with high inventory and few buyers...a buyers market...it's just the opposite.  Buyers have a large inventory of homes to choose from, they can be picky, asking for sometimes an unreasonable amount of repairs or cosmetic work to be completed, low ball offers are more common and negotiating more closing costs to be paid by the seller there by getting a great deal on a new home.  And in this scenario the buyer does well getting a great home for a bargin price.   Of course if that buyer had a home to sell then they too were faced with a buyer that got their home for a great price.  You can't make it on both ends.

So look at it in reverse of the way you are used to.  Instead of buying and waiting for appreciation to pay a dividend when you sell...you are selling your home for less but you are also buying your next home for less and at historic low interest rates...you could be buying more house under better terms than your last home.    Taking advantage of the low rates and lowered housing prices will more than make up for the lower selling price of your home in a down market. 

If you need a knowledgeable real estate professional in Madison or Huntsville Alabama area, why don't you let me Google that for you!  I also know outstanding agents in all states and Canada should you need help relocating to a new area.

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  1. Dawn A Fabiszak 12/24/2010 04:33 PM
Topic:
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Ambassador
1,833,634
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut - Middletown, CT
Your Connecticut Mortgage Expert

Nick well put, unfortunately many Sellers seem to think that everyone is just waiting out there to give them more than their house is worth, and that they can turn around and buy a house for far less than it is worth.  They need to read this and be brought back to reality.

December 22, 2010 11:16 PM #4
Rainmaker
998,404
Nick T Pappas
Assoc. Broker/Broker ABR, SFR, e-Pro, @Homes Realty Group, Huntsville AL - Huntsville, AL
Madison & Huntsville Alabama Real Estate Resource

George, I appreciate your comment...when you talk people listen!

December 22, 2010 11:37 PM #5
Ambassador
897,427
Andrea Swiedler
Berkshire Hathaway HomeServices New England Properties - New Milford, CT
Realtor, Southern Litchfield County CT

Nick, I think this is one of the biggest problems we face these days. I cannot understand this, but the reality is, many sellers just don't understand that they may sell lower than they wanted to, but will buy low also. It is a mystery to me.

Great post!

December 23, 2010 07:12 AM #6
Rainmaker
74,182
Vanna Siackhasone
Real Estate Brokers of Alaska 907-720-4663 - Anchorage, AK
Anchorage Real Estate 907-720-4663

Nick, you are absolutely right. it's important for buyers and sellers to remember what their goal is and to understand that if they are move up buyers or even downsizing that the market is the market and that they would be benefiting when buying even though they may be getting less than what they had hoped for on their home.

December 23, 2010 02:02 PM #7
Rainmaker
261,251
Dawn Crawley
Dawn Crawley Realty - Pinehurst, NC
Find Pinehurst Homes

So it really IS all about supply and demand!

December 23, 2010 06:22 PM #8
Rainer
30,113
Phil & Celeste Pafford
PaffordHomes.com, Corona CA - Corona, CA
Corona Short Sale Broker

I "try" to get our sellers to understand, while they may not be making the profit they "want", they are also not paying as much for their new home... they seem to forget this little gem of info!  ;-)

December 23, 2010 08:03 PM #9
Rainmaker
390,932
Elizabeth Cooper-Golden
Huntsville Alabama Real Estate, (@ Homes Realty Group) - Huntsville, AL
Huntsville AL MLS

Nick, What a wonderful post.  SO true!!!!   "You can't make it on both ends".  Amen my friend, Amen!

December 23, 2010 11:20 PM #10
Rainmaker
390,932
Elizabeth Cooper-Golden
Huntsville Alabama Real Estate, (@ Homes Realty Group) - Huntsville, AL
Huntsville AL MLS

I forgot to say "Congratulations on the feature"!!!!  Yea!!!!

December 23, 2010 11:21 PM #11
Rainmaker
558,659
Chris Olsen
Olsen Ziegler Realty - Cleveland, OH
Broker Owner Cleveland Ohio Real Estate

Hi Nick -- Totally agree. What may seem obvious to us isn't always obvious to a consumer.  Even if it is, we earn our keep by providing exceptional advice and guiding our clients to a successful conclusion.

December 23, 2010 11:36 PM #12
Rainmaker
849,444
J. Philip Faranda
J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY - Briarcliff Manor, NY
Broker-Owner

This is the sort of bog that is a must read for anyone considering the "move up" who is facing getting hammered on their sale and then wants to buy another home. 

December 24, 2010 04:37 AM #13
Rainmaker
557,068
Scott Fogleman
Witt-Fogleman Team 434-941-8847 - Forest, VA
Witt-Fogleman, Inc. - Bedford, Lynchburg, and Roan

So true and so many people are waiting for the price of their home to "return".

December 24, 2010 06:37 AM #14
Rainmaker
892,536
Michael Setunsky
Michael's Commercial LLC - Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Nick, so true! The seller need to put them self in the buyers shoes. Thanks.

December 24, 2010 09:27 AM #15
Rainer
214,957
Diane Williams
Pell City, AL

Nick, a nice post that states the facts as they are.  All sellers should have this post in their listing package.

Congratulations on the feature post.

I hope you and your family have a very Merry Christmas!

 

 

December 24, 2010 09:36 AM #16
Rainmaker
87,937
Scott Petersen
Client First, Realtors - Canton, MI - Canton, MI

Isn't it human nature to have it all. Thanks for bursting the bubble that we can't. Merry Christmas.

December 24, 2010 12:35 PM #17
Rainer
136,154
Brent & Deb Wells
RE/MAX Four Corners - Prosper, TX
Your Collin County Realtors

Nick,

Your right on the money. Consumers have been conditioned to get 0% car loans, 40% off retail items, easy payment terms and any other gimick to sell product. Homes are a completely different animal. We as agents need to take the time to explain to our clients what to expect in every aspect of their transactions. Helping them see the value of moving up in this economy will let them realize what a great deal they are getting.

-Brent


December 24, 2010 12:52 PM #18
Rainmaker
998,404
Nick T Pappas
Assoc. Broker/Broker ABR, SFR, e-Pro, @Homes Realty Group, Huntsville AL - Huntsville, AL
Madison & Huntsville Alabama Real Estate Resource

Thank you all for you comments and taking the time to stop by during this busy holiday season.  As many of you know I'm currently on the road visiting Illinois, but will be by your individual posts as soon as I can.

Have a great holiday and stay safe.

And thank you very much to the powers that be for the feature...very much appreciated.

December 24, 2010 02:24 PM #19
Rainmaker
998,404
Nick T Pappas
Assoc. Broker/Broker ABR, SFR, e-Pro, @Homes Realty Group, Huntsville AL - Huntsville, AL
Madison & Huntsville Alabama Real Estate Resource

Andrea-I think it's just a different way of looking at the same question...how or where am I making my money.

Vanna-the market is what it is...and you adjust or "shift" accordingly.

Dawn-that would be a yes from me.  Thanks for stopping by.

Pafford Homes-buyers and sellers in the market are used to it being one way...not always easy to change your way of thinking.

Beth-I'd sure like to know how to make it on both ends...bottle it!!!  And thanks for your kind words...have a great Holiday.

December 24, 2010 02:35 PM #20
Rainmaker
634,555
Dawn A Fabiszak
Keller Williams Real Estate ( Denver metro area, Colorado - Aurora, CO
The Dawn of a New Real Estate Experience!

Nick ~ congrats on the feature.  It's amazing how many folks would love to be able to do this, myself included.  I am going to re-blog this.  It's fabulous information!

December 24, 2010 04:15 PM #21
Ambassador
411,263
Susan Goulding
Crown Key Realty, Tracy & Mountain House Real Estate - Tracy, CA
Northern CA - Tracy & Mountain House Real Estate

Nice Feature - and you are so right.  Thanks Nick.

December 24, 2010 04:33 PM #22
Rainmaker
996,038
Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate

Nick:  The concept is very true.  You cannot make it on both ends.  It is just bizarre that people think they can.

I had the same thing come up many times a few years back... when the concept of "mineral rights" was "the thing" of the moment.  There was lots of drilling for natural gas in the Fort Worth area... and many sellers both were adamant about retaining the mineral rights of the home they were selling... but equally insistent on getting the mineral rights of the home they were buying.  It made no sense... but they just insisted anyways.

December 24, 2010 10:42 PM #23
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Rainmaker
998,404

Nick T Pappas

Madison & Huntsville Alabama Real Estate Resource
Call or email me anytime with your questions.
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