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Thursday, March 18, 2010

Realtors, Barbers & "Haircuts"

Is it "Always a Good Time to Buy?"

Never ask a barber if you need a haircut.

--anonymous

Barber's corollary: never waste time on someone who isn't sure they need a haircut.

--Ross Kaplan

So, The New York Times ran a piece last week basically saying that -- surprise, surprise -- Realtors always think "now" is a great time to buy. See, "Great Time to Buy (Famous Last Words)."

No doubt there are some Realtors who do.

But for every Realtor who proffers such advice, there are probably at least three would-be Buyers who don't really know whether they want to buy something -- and are happy to eat up Realtors' valuable time while they decide.

In my experience, Buyers buy when they're ready -- not when their Realtors convince them to.

If it were otherwise, you wouldn't hear so many stories of Realtors spending months (or years) working with "clients" who decided they really didn't want to buy, after all -- or who "just couldn't find what they were looking for" after viewing dozens -- or hundreds -- of homes (effectively, the same thing as deciding not to buy).

Discerning Motivation

Which is why one of the most important things for a Realtor to do is determine Buyer motivation.

In my experience, here's how motivation shakes out:

Real: Job transfer to another city; change in family size (bigger, smaller); newly married (or divorced); change in financial circumstances (worse, better); health/mobility issues.

Not Real: curious about "how much house 'x' can buy"; will buy only if they can get 'y' for their current home; current home needs remodeling or updating that they've been putting off (this can be a real motivation, but just as often it's a red herring -- especially if they've been mulling it over for years).

Market Predictions

"Yeah, yeah," I can hear you say, but, "is it a good time to buy??"

If Warren Buffett, the world's greatest investor, can't forecast short-term stock market moves (he's explicitly said so, many times), I'm not about to forecast short-term moves in the housing market.

And anyone who says otherwise is full of it.

Instead, my standard comeback is, "you tell me what interest rates, GDP, unemployment and inflation are going to be . . . and I'll give you an educated guess about housing prices."

While I can't predict future housing prices, I can (and do) promise to help my Buyers find the best home for their budget and criteria.

Or, if they're Sellers, I promise to help them get the most money that current market conditions allow.

1 comment:

Net said...

We hadn’t intended to sound so kind, since, no matter what kind of rescues are tried, we still expect real estate prices to fall by a further 35 percent before deflation has run its course in perhaps five to seven years.






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