Friday, February 03, 2006

When real estate agents get together, what do they talk about --- Real Estate!

By Peter C. Fyler - Exclusive Buyer's Agent

I was chatting with some of my colleagues the other day regarding their perception of today’s market. There is an old saying in real estate; your first offer is usually your best offer. That advice should be given to sellers when they ponder the question, "If I hold out, will I receive a better offer?".

I think this is an opportune time for buyers because sellers are not sure how solid this market is. One of the seller’s agents I was speaking with said he believes sellers are becoming surprisingly willing to engage and negotiate offers far below their asking price. They are anxious, impatient and driving the seller agents crazy with their #1 question, “Why am I not getting any offers on my property?” This all confirms my belief that this is a good time to get into the market, although I can tell you the market is very solid on Martha’s Vineyard despite the fact it has slowed down.

I believe for the next few years we will experience single digit appreciation opposed to the double digit gains we have realized for the last few years. These numbers are nothing like what we saw in the mid 80’s but speculators are still over extended. In the late 80’s, speculators got arrogant and kept on investing in more and more properties and/or building more and more houses. When the bubble burst they were left holding a big bag. Once again I think they are “feeling” stuck and they are panicking. However, this time the stakes are much higher as property values have at least doubled to perhaps tripled in some areas and the houses are equally large.

Panic is good; it translates to my belief that if you want to get into this market and make a long-term investment, now is the time to do it. However, I want to be perfectly clear; you have to approach the market with finesse if you want to succeed. This means “low ball” is not the operative game plan, but bold realistic offers are what could make you a winner. In my opinion the smart strategy is to approach the process with the mindset, 1) you cannot be emotionally attached because you may be buying a stepping stone which means it might not be the perfect scenario or your permanent vacation home, and 2) you have to be willing to walk away and move on to the next property if the seller does not accept your offer. As my mother and some old guy used to say, “Faint heart never won fair maid”. Another clichéd phrase is “nothing ventured nothing gained”. You can always revisit your offer another day, shall we say, after the porridge has cooled down.

I will close by relating my own experience when I wanted to buy a home in Florida. My wife and I looked and looked, and every time we went to Florida the prices were higher. Finally, I said we had to do something or we would never get into that market. We bought a property that has gone up practically 100% in two years. I realize our gain is only on paper right now but the market is still strong in the area and when we are ready to move to the property we really want, we will have this property as our foothold and margin builder. I don’t know if that makes sense to you but I think we did the right thing.


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