Welcome to the "Buyer's Market"

Many home buyers I converse with are pretty quick to ask "...because it's a buyer's market, right?" Without hesitation I assure them that in general - they are right. So what is the buyer's market and why is it important to consider as a buyer or seller right now? The term is simple enough as an economic definition, but I want to be sure some of the technicalities aren't missed, so here it goes...

A buyer's market, sometimes referred to as a "soft market", is defined as a market that has more sellers than buyers. Housing inventories in this type of market are saturated and buyers are anywhere from fewer to scarce. To some degree, there is an oversupply of houses relative to the demand. The problem with the term "buyer's market" is that it rarely encompasses the degree of this imbalance. In a market that is extremely "soft", buyers obtain an entirely new level of authority over sellers.

I will demonstrate some numbers in an example: I sit down with a couple looking for a 3 bedroom, 2 bathroom home with a garage and more than 1200 square feet of GLA (gross living area; above ground). They want to live in North or West Ames, where there are 68 houses listed; quite an abundance. Of these, maybe 13-16 of them meet their specifications. Over the coarse of the next 2 weeks I show them 14 houses of which they find 4 very desirable. The next week we look at those top 4 homes a second time and after some long discussions and side-by-side comparisons my buyers decide to make an offer on a house.

The take-away from this example is threefold. The first key is that because of the high number of houses listed, the buyers found 4 that they were willing to act upon, having options all the way down to the wire. This leads to our second point: if the negotiations on the first choice house aren't going well or don't come to fruition, the buyers can simply turn to any of the 3 other predetermined houses that they like. The third and final point is extremely important for sellers. Price your home competitively!!! Unless you have a product that is more unique and desirable than the rest of the market's, the price is what may very well keep your home from being one of the top picks in the first place. It's easy to say that you'll list your home at a higher price and leave more room for negotiating, but the truth is that you can't negotiate an offer you don't receive. The odds that somebody else will price their house to sell are stacked against you in this type of market.

High competition means sellers need to take the extra steps to sell their house fast and for near asking price...
1. Price your home competitively. You have one chance to make a first impression, so don't let it be one that is asking too much. In addition, you will get the highest buyer interest in the first few weeks of having your home listed, which needs to be taken advantage of.
2. Update and Prep to show. If something will obviously need to be done to a house in the near future, take care of it up front, adjust the price appropriately, and make your home more appealing and less of a "project". There are too many foreclosure project houses out there, and most buyers looking at owner-occupied homes have reasonable expectations. Clean, depersonalize, and de-clutter your home so buyers can "see themselves" living there.
3. List your home with an experienced realtor who has a thorough marketing plan. Your real estate agent's experience, advanced marketing exposure, and intensity in their business can easily be the difference in selling your home.

Home buyers can also do more to maximize their home buying experience in this type of market.
1. Deeply analyze your needs. With an overwhelming amount of options, try to narrow what you are looking for down to something more specific, and widen your parameters if nothing is showing up. Looking at a variety of 30 houses is wasteful of your time and unnecessary if you don't know what you exactly want yet.
2. Don't over pay for a home. Have your agent do a CMA and make recommendations on a home's market value. If there are a few houses that would work well for you, start with your favorite and see if you can get it at a reasonable price. If you can't come to terms than walk away and try another house. Saving considerable dollars is easy if you not only shop the houses, but the sellers to see who is more motivated to strike a deal.
3. Get an exclusive buyer agent! Find a realtor who specializes in finding you the perfect home and can give you more time and effort than an agent trying to market homes at the same time.

To conclude, the "buyer's market" generally favors home buyers and makes selling more challenging. Home buyers need to know exactly what they want to filter through the inventory, and sellers need to go the extra mile to make their product stick out in buyer's minds. Home buyers can save money if they search for deals and negotiate the deals further, and for sellers it is absolutely crucial to initially price their home correctly. If you are thinking of buying a home the time is now if you are financially sound. Get in touch with The Steve Bock Team to find out how we can sell your home in this tough market, or how an Exclusive Buyer Agent can make finding a home less work and time effectively spent. Keep an eye out for our next blog soon and keep well!

Nate Bock, Exclusive Buyer Agent

Buyer Representation and "Buyer Agents"

In this blog I get the opportunity to talk about something I'm a bit partial to. I myself only work with buyers and go by the title of "Exclusive Buyer Agent", although agents of this type also go by "Buyer Specialist" or simply "Buyer Agent". I think this an important topic in real estate that isn't talked about very frequently. In fact, the idea of an agent that only represents buyers was never a popular one in real estate history and only recently has become more popular, especially in cities where agents are numerous. The traditional real estate ideology is that if you as an agent are selected to help someone sell their home, you will also help and represent them buying a home. Thus, an agents sellers become the buyers by default, and will also hopefully list their house with them someday.

This theory has a few small "gaps", the largest being first-time home buyers. First-time home buyers not only have no house to list and sell, but are also without a doubt more work for less money. As an agent you are dealing with clients that are doing something completely new, will be greatly influential on their future lives, and is almost certainly the largest financial transaction they will make for a long time. Purchasers in this situation will have a plethora of questions and high limitations financially. Another loose bolt in the traditional ideology of real estate is dual agency. Dual agency is the situation that results when both the buyer and seller of the same transaction are represented by the same agent. In short, if an agent will be helping you find a new home, and they have listings similar to what you may be looking for, there is a chance of dual agency. Although in theory a single realtor can represent both parties equally and fairly, I do not believe there is any way they can represent both clients fully and work in their absolute best interest.

The above mentioned "gaps" in the traditional system are good reasons why buyer agents are growing in popularity, but it certainly isn't the entirety of their benefits. Since buyer agents do not (generally) have any listings, you never have to worry about dual agency. Buyer agents spend all of their time working for buyers, so they have learned how to serve them more efficiently and effectively. These agents also typically know the inventory very well, and may be able to give more specific advice on "bang for your buck". This can be attributed to the frequency of showings. When a traditional agent has 5 homes listed and is helping 2 buyers actively with their extra time, a buyer agent may be working with 4-6 active buyers, and could easily be seeing 3x as many homes in person.

So there is an overview of why one can consider using a buyer agent when purchasing a home. It isn't by any means necessary, but can without a doubt be a better experience, especially if your listing agent is successful but busy maintaining their listings. You don't want to be the subject of how a realtor spends their spare time. Since buyer agents do not typically list homes, they rarely do business without a partner agent who lists homes. Buyer agents such as myself are often incorporated into teams or partnerships to make their services most effective. I have been serving buyers exclusively since the day I started real estate and have very much enjoyed it. Being a recent first-time home buyer myself, it is easy to relate to my clients. Thanks for reading this blog and keep an eye out for our next one soon! Get a hold of The Steve Bock Team with any questions and we'll be happy to answer them.

Nate Bock, Exclusive Buyer Agent

Choosing A Real Estate Professional

When it comes to choosing a service professional, real estate agents are a big decision. One of the largest investments of your hard-earned money deserves a carefully selected professional. So what do you look for in a real estate agent? To most people it is simple: somebody who will put them in the house of their dreams, without problems, without charging too much for their services. However, being an agent and having an insider perspective, there is so much more to it than that. 95% percent of the items we purchase as consumers are pretty straightforward as a transaction. You figure out what it is you want, find the cheapest one, and buy it. Return it if you change your mind or it is dysfunctional. With houses, it’s a thorough challenge to meet all of your needs. Figuring out what you want is only half of the battle, not to mention the challenge of shopping around and coming to terms on an acceptable price. A small army of people are usually involved in the transaction; lawyers, other realtors, inspectors, appraisers, lenders, underwriters, etc. Everything above contributes to why choosing your real estate agent is so important. They are your “go-to guy” for getting questions answered and making sure all of the small processes move seamlessly for you, the buyer or seller.

Of course you want an agent who is friendly, easy to work with, and knows the ropes of the business. On the other hand if this person doesn’t have attention to detail, responsive communication skills, and a full-time work ethic, you probably deserve better. Many agents only work in this business part-time, as supplemental income or as a hobby. This agent may lack a current market knowledge, the time you deserve, or timely communication to keep things moving. Having a full-time and involved agent benefits clients with the latest knowledge of the market and where it is heading. An agent with professional designations and who is current with legal and ethical topics is also key. Lastly, with as many issues that can come up as in real estate, experience will usually speak for itself. An agent who has successfully negotiated situations like yours, or has overcome an unforeseen issue before can sometimes keep a sale together that normally might fall apart.

As you can probably guess, The Steve Bock Team is composed of more than a single agent, and for good reasons. As agents we are licensed to handle a transaction from both ends, whether representing buyers or sellers. The traditional agent has a primary focus on obtaining listings and maintaining the relationship with their sellers, while helping homebuyers in their additional time. Our team specializes one step further, with one agent representing sellers and the other buyers. Each agent spends their time representing one type of client on one side of the transaction. The end result is a more exceptional and personal service to those clients. A single agent can only do so much, but 2 realtors and 2 service coordinators working together really delivers 4 person service for the price of one agent.

So the criteria to choose a real estate professional on are many, and we only covered a handful of them today. Just keep in mind when choosing your realtor that there should be more to it than a friendly face, somebody you know, or a relative. Find an experienced agent that works hard and is trustworthy. Don’t be afraid to ask them how they can differentiate themselves from other agents, and don’t commit to an agent that won’t commit to you. That’s all for this week, but check again soon to learn more about our team, and more about real estate, because the more knowledgeable you are the better!

Welcome!

Have you heard the saying, "All real estate is local?" It's true!

We know there are a lot of concerns across the nation right now about the real estate market. Relax ... we are here to answer your questions. We are experts in our market and can help you understand what is going on in Ames, Gilbert, Nevada, and Story County Iowa.

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- The Steve Bock Team