By Brendon DeSimone
SEATTLE (Zillow) — When markets move in a positive direction, you’ll hear it from real estate agents first. They see busier open houses, quicker sales or even multiple offers. By the time the news finally hits the mainstream media, buyers start to feel the pull to get back in the market.
That’s what we’re seeing in many parts of the country right now. With all signs tilting toward a sellers’ market for the first time in years, it’s helpful for buyers to understand today’s seller. No two sellers are alike, of course. But there’s a certain mindset that many sellers these days share, and it’s a grateful one for many. Understanding that mindset can help buyers more successfully and easily navigate the process of buying a home. The same holds true for sellers. They should understand the buyers that stand before them.
Here are three things homebuyers should know about today’s sellers.
1. Many homeowners are in a negative equity position
According to Zillow’s negative equity report, 28% of homeowners with a mortgage today are underwater. Many sellers have been hoping and wishing for prices to increase just a little bit. Some have outgrown their current home, are forced into an hourlong commute (or longer) each day or simply want to move to a new town or area. But due to negative equity, they’ve been stuck. The emergence of a sellers’ market provides them with a glimmer of hope. They just may be grateful for any offer that will allow them to get out at last.
2. Sellers are often buyers, too
Often, sellers feel the same amount of stress or excitement that buyers feel because they’re somewhere in the buying process, too. Though some sellers will become renters after their sale is complete, many will get back in the homeowner game soon after the sale goes through, sometimes immediately. Sellers, as would-be buyers, want to capitalize on low interest rates and home values. Getting the home sold quickly and at today’s value may be all a seller needs to make a purchase. Though it may be a “sellers’ market,” these sellers usually aren’t greedy. They feel the buyer’s pain and likely want to get out cleanly and quickly so that they too can buy.
3. Sellers are starting to feel relieved but are still cautious
Even the sellers who are above water or own their homes outright are well aware of what’s happened in the real estate market over the past five years. They’ve watched their friends and neighbors lose their shirts on real estate, get forced to do short sales or even have their homes foreclosed. They welcome the news that the market is changing, and in their favor, at last. They’re more hopeful than they were even six months ago. Generally speaking, however, sellers who aren’t stuck in their homes (because of depressed home values or other reasons) are still feeling conservative and cautious. They’re more likely to take a bird in the hand than risk losing a sale because of greed.
Advice for buyers
Real estate is a game, in a sense, in which both sides hope to achieve their goals, which is why it always helps to understand your “opponent.” When you’ve found a home you like, figure out who the seller is, how they got there and why they want to sell. Don’t make assumptions. Take a step back. Put yourself in their shoes.
Sellers aren’t the same as they were around 2005, when many were driven by greed as the market’s rise seemed endless. They’ve just weathered the worst real estate market crash in decades, so don’t go into this market, which is very different from even six months ago, assuming sellers are looking to take advantage of you. Don’t let your real estate agent convince you that’s the case, either. Even though you might think they have a hot property that will sell quickly, the seller is usually willing to negotiate. They may even be grateful to get a reasonable offer, especially if it at least comes close to the value their home had before the crash.
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