"The Unrealistic Buyer": Top 10 Signs

Unrealistic Sellers Meet Their Match

Their counterpart, the Unrealistic Seller, has received more ink and attention, but these days Unrealistic Buyers are just as numerous -- and intractable.

As a public service to would-be Home Sellers, herewith are my top ten signs that you may be dealing with an Unrealistic Buyer (any resemblance to real persons isn't purely coincidental) :

10. They're on their third Realtor -- or don't have one.

9. They've been looking for more than a year . . .

8. and have seen more than 30 homes, which they've all pronounced "grossly overpriced" (and otherwise deficient).

7. They've yet to make an offer on a home.

6. They've already made offers on more than four homes -- none of which has even elicited a (genuine) counter-offer.

5. If they actually receive a serious counter-offer, they refuse to work with it.

4. They know the minutiae of the Purchase Agreement and Addenda as well as their Realtor -- and are better at opening lockboxes.

3. They offer more than 15% below a well-priced home's asking price (see also, #6).

2. They have no discernible timetable or catalyst (new job, baby, expiring lease, etc.) for buying a home (see also, #9).

1. They let you know that they're thinking about getting their real estate license.

There!

Forewarned is forearmed (now read "Serious Buyers: Top 10 Signs" to contrast with the foregoing).

P.S.: Sign #11: they'll only agree to buy something for 20% or more below market . . . if they can sell their current home for 20% above market.

Real Estate "Trump Cards" -- Buyer's Version

Fanning the Fear of Loss

If the ultimate trump card available to Sellers is the existence of multiple offers (see, "Is it REALLY in Multiples?"), what is the equivalent for Buyers?

The threat to move on to another home.

So, how credible is such a threat?

Interestingly, the three-step analysis for Sellers parallels the one confronting Buyers facing potential competing offers.

Move on to What?

Step One. Is the threat plausible based on the house and the market?

If there are ten similar homes for sale nearby that are all about the same price and in the same condition, and the Buyer says that they'll move on if their offer (counter-offer) is rejected . . . you'd tend to believe them.

Even if that's a stretch, if the home in question has been on the market for awhile, it may be hard for the owner to pass up the Buyer -- and offer -- in front of them.

That's especially true if showings have been few and far between.

By contrast, a Buyer who threatens to "move on" is less credible when: a home is new(er) on the market; it's priced very competitively relative to its peer group; and its location, design or other features make it relatively unique (i.e., it has no close substitutes).

Good agents know the competing inventory, and whether a given home is poised to sell -- or sit.

Step Two. Probe the Buyer's Agent.

Just like Buyers' agents have been known to ask the identity of other bidders, Listing agents can certainly ask what other properties the Buyer is considering.

They may not answer (and don't have to), but simply the way they field the question can be telling.

I represented a Buyer two years ago who had exhaustively studied the market, and had rank-ordered their top three choices (which were all virtually tied).

When negotiations to buy their first choice stalled, I informed the Listing agent that my client was ready to move on.

"To what?," came the instant reply.

Without hesitating, I gave the addresses of the two "runner-up" homes, and proceeded to rattle off each one's merits and drawbacks relative to the subject home, their market history, current asking prices, etc.

The Seller came around.

Step Three. If neither of the foregoing techniques work, there is always a surefire way to determine whether a given Buyer's threat to "move on" is real.

Wait.

If they were bluffing -- or couldn't get an attractive enough deal on house #2 (or #3 or #4) -- they'll be back (undoubtedly with a stronger offer!).

On the other hand, if house #2 goes "Pending" two weeks later, and the Selling agent is the same one you were just negotiating with . . . it wasn't a bluff.

Plodding Pace of Year-End Deals

Hurry Up and Wait

If you're a prospective home Buyer who initiates a deal just before Christmas -- especially if it's a bank-owned property -- you're likely to get everything wrapped up a week into the New Year (if you're lucky -- I've got one in progress now).

If you're a Buyer who initiates a deal after the 1st, you're likely to get everything wrapped up . . . about a week into the New Year (if you're lucky).

Which is a pretty good case for just waiting until after the 1st.

That's especially true for first-time Buyers, who typically have the hardest time waiting to find out if their offer has been accepted, rejected, countered, etc.