It’s what most buyers want … but odds are, it’s not going to happen.
In more than 30 years of Hamptons real estate, I can think of just one example of a couple who bought a house when the market was low, then sold their existing house when the market was high — all in the same neighborhood and in just six months.
It was a fortuitous confluence of events: A seller had to sell ASAP, the purchasers had previously seen and loved the house, they didn’t need to sell in order to buy (and had the means to transact quickly), the broker happened to learn of the seller’s situation right in time and the market tipped downward from one day to the next … then quickly snapped back.
The reason I only have the one example in so many years is that a real estate sweepstakes does not often come to ordinary consumers. And even when it does, and even when the purchasers love the house, there remains the famous what if question — what if we waited? If this seller was in trouble, maybe there were other sellers in similar or worse situations; they could have nice properties, too.
The purchasers I mentioned above successfully turned off their inner chorus of what ifs. They took a chance, which in retrospect was a very smart decision. The seller also took a chance. What if he waited, wouldn’t other home shoppers jump at such a good deal and create a bidding war?
Because we cannot see the future, every deal, no matter how good or bad a market is, can become more so. It’s only in the rear-view mirror that we see the peaks and the valleys; every deal can turn out to be too soon or too late.
You can only buy and sell at market value.
Customers will tell us they’re waiting; they’re not ready yet. We’ll come back in January, they say, thinking somehow, they can outsmart the market. They think that sellers, for instance, will be more desperate in January than they were in November. In reality, that’s not the case. You need something more than the three months passing to change the market. You have to wait longer than that, or you have to change markets — buy in a less pricey location or with scaled-down expectations.
If someone tells me they’re waiting, I ask what they’re waiting for. And when they tell me they’re waiting for the best deal; I tell them the best deal is a property they love and can afford. The best deal is all too often missed when the aim is more for the bargain than the right property. Market timing may be great for professionals and others who are less risk adverse. But if you’re buying a property for your own use, at any given time, you can only buy and sell at market value.
Regardless of market or budget, if you really want to buy and you really like a house you can afford, buy it. Same goes for sellers: If a credible offer is presented, consider it seriously as your home is worth what someone will pay, not what you wish it to be. If you wait, the market may not go in the direction you thought and/or you might fall prey to a regret I’ve written about before: the one that got away, whether the dream home you were waiting to cut its price or the buyer you were trying to negotiate up another $200,000. That one that got away becomes a shadow that falls over the months and even years to come. That shadow makes it difficult if not impossible to find something that measures up to what you could have had, or thought you had, before.
Beware stories of real estate triumphs
After this many years in the business, I’ve heard more than my fair share of real estate hyperbole. The stories generally are told in social settings, often with material facts overlooked or misheard. Many of them center around a deal that sounds too good to be true — a seller who made killing on his house, then bought an amazing property for next to nothing; a couple who bought a house at half its asking price; a seller with a property so popular that a bidding war drove up her sale price by hundreds of thousands of dollars.
When I hear these stories, half the time I’m familiar with the property (Hmmm, did he mean south of the highway or south on the highway?) or I can easily look it up (Seems like there are more zeros in this story than there were in the actual deal). Maybe that house needed twice the sale price in renovations, or that summer rental price quoted for the season was actually for a month. Stories of real estate success tend to get embellished as they spread, so I wouldn’t necessarily believe what you hear until you have the facts. Just as it’s hard to turn off self-generating what ifs, it’s also hard not to be distracted by the alleged triumphs of well-meaning others.
About those well-meaning others …
There is no shortage of family, friends and acquaintances with real estate advice to offer. And it seems those who are reluctant to commit tend to engage others for help and more often than not, consciously or not, the advisors selected embrace and fuel the caution.
There’s nothing wrong with waiting. It’s wise to know the right time to buy and sell, but generally those times have more to do with you than with the market conditions. One needs to see the future to hit the peaks and valleys of a market. Yet our housing needs are about our personal and familial ups and downs.