Long Beach Real Estate-Long Beach Condos

Everybody Hurts!

A Little Compassion Can Go a Long Way

Whether you are selling your Long Beach home or buying a new one, it is often an emotional experience.  So many feelings are exposed, sometimes like raw nerves.   

Sellers are plagued by an assortment of unpleasant issues including: 

• Losing all of their equity
• Being fortunate enough to sell and maybe break even
• Many have lost or are losing their homes
• Are selling for less than they purchased
• Are losing their down payment investment in their homes

Foreclosed or Bank Owned Homes are entering the market daily at prices attractive to buyers and are continuing to compromise the conventional seller's price point.  Short sales, for the most part, are just a disaster for everybody. 

Sellers have their crosses to bear in this market.  These are real people many of whom are caught in precarious positions.  Their homes and the roofs over their heads are in jeopardy.  They are worried about providing for their families, finding affordable housing, losing their jobs, taking care of their pets, taking tremendous hits to their credit scores and more.  Often they are in heartbreaking situations. 

They are mostly listing their homes at what appears to be market value or below only to be faced with few showings and price reductions they are not really mentally prepared for. 

Sellers are receiving low offers on already reduced prices asking for further concessions, leaving them wondering if there is a bottom to this pit in which they find themselves trapped:

• Offers mostly coming from buyers who are barely qualified and may not be able to close escrow.
• Buyers changing their mind about the purchase-in the middle of escrow.
• Unexpected inspection issues and repairs requests on their homes, with severe financial repercussions.
• Many buyers losing their loans or their lenders go out of business or drop their loan program, just days before the close of escrow.
• Sellers finding themselves packed to move and losing their buyer.
• Sellers getting angry at the one buyer who writes an offer because they feel like they are being taken advantage of.

Buyers are shopping, often for long periods of time, seeking the deal that has been promised to them by the media, friends, family and just about everybody who has been giving them advice and telling them that they should not be paying full price. They have been advised that they should be getting a great deal; after all the market is tanking and it is a buyer's market. 

A great deal is discovered by investigating comparable sales and listings.  Some buyers don't care that the comparables indicate that the home they are interested in is a great deal, they want a deal on the offering price after shopping for the lowest priced home they could find that meets their criteria; this is usually a recipe for a disastrous shopping experience. 

Successful buyers keep track of the housing market in their areas of interest prior to shopping for their home.  They have watched the prices roll down and have become intimately familiar with prices in their future neighborhood.  When the right home enters the market, in acceptable condition, in the location they want and at the price they are willing to pay, they will write an offer. 

Fast and swift is becoming the order of the day.  Great homes entering the market are in high demand and are receiving multiple offers, sometimes the early bird does get the worm, but many sellers will hold back and wait for the multiple offers to come in.   Many buyers are writing offers and being rejected on home after home.  They are being outbid repeatedly by:

• Buyers with large down payments
• Buyers making full price or near full price offers
• Buyers requesting little or no concessions
• Buyers with high credit/FICO scores
• Buyers with loan approval who can close escrow quickly
• All cash buyers and investors who can close escrow quickly

Buyers can and do discover serious issues during their physical inspections.  With little or no money for after purchase repairs or upgrades, and little or no seller cooperation, they are being forced out of escrow. 

For several years now many buyers have been sitting on the sidelines waiting for the right time to jump in and buy.  Many of these buyers are first time homebuyers with 100% financing which has now disappeared.  They find themselves once again priced out of the market they waited so long to beat. 

Lenders are continuing to raise the bar on qualifying for a home loan.  Just this week lenders began to demand a 10% down payment for the purchase of a condo, 3% for an FHA loan, but only a few condominium complexes are FHA approved here in Long Beach.  Interest rates are up once again.

Interest rates have been the silver lining in this real estate fiasco of the past several years.  Currently lingering in the 6.5% range these are still very good interest rates.  Personally I am surprised, and very grateful, that rates haven't climbed much higher. 

Buyers are facing tougher negotiations on desirable properties and tougher lending standards which have negated a home purchase for all but the most qualified.  Many buyers are hurting and are in emotional distress, they are worried that they will never be able to purchase a home. 

There are days when I wonder if some buyers and sellers in this market are negotiating to cause the greatest possible pain to the opposing side of the negotiation.  When the pain reaches maximum level either the opposition will capitulate or run. 

We all need to step back and remember that we are all just people, in real emotion packed situations; that we all have a story; reasons; and a pain threshold.  We all need each other to make this happen.  This can all be handled with less stress for everybody involved.  We all need to be a little more reasonable and remember that a negotiation involves more than one person doing the giving and that we must give to receive.  If we can accomplish this then we have a win-win situation for everybody.

Everybody matters.