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What Kind of Real Estate Market Are We In?
By Harriet Cochran Murrray • Cochran Real Estate - July 2009

When there is uncertainty in the economic or political climate in a country, can you convince anyone to buy?  As a general rule, people are always buying or selling to meet their needs. When the market shifts, the target client shifts as well. 

In a buyer’s market, sellers compete with their product and price against other sellers. Buyers have many choices and can get better or lower prices for what they choose to purchase. 

Changing markets require us to identify and find who are the new buyers and sellers.

• Who are the buyers?

They are people who already know and trust Mexico. They are not put off or influenced not to come because of the US and Canadian media frenzy about their North American brother.

Buyers know the value of location, weather, life-style, culture, buying power, medical care, friendly residents. 

Buyers know there is more inventory than there is demand. They expect and are entitled to find bargains.
 
Buyers are patient and will wait until they find the “right deal.”

Cash Buyers have cash, credit lines, or financing already lined up.

Buyers who need financing will be attracted to owner financing.

• Who will be the sellers?

Sellers will need to be motivated.

Sellers will need to realistic in pricing.

Location and condition affect price.

Pricing:

The harsh reality is that the market just doesn't care what price an individual wants or needs to sell his property. If I had purchased IBM stock for $100 per share, and wanted to sell it for $140 per share because I need the money, but the market for IBM stock at the time is only $110 per share, no one is going to pay me $140 because I need it. They will offer me the $110 that the market's offering.

Sellers should consider offering their own financing if they need to get a higher price than an all cash one. Financing can be long enough to enable a buyer to obtain a competitive loan when mortgage markets are stable. Giving a buyer a 5 year call or balloon payment, should enable him  to finance out and give the seller the cash, plus the payment over the term of the loan.

Sellers would be wise to come as close as possible to the amount of down payments and rates which their buyers find attractive. American buyers are accustomed to small down payments, but could be convinced to pay more. Canadians are used to 20-30% down payments, but will look more objectively for the best value.

Sellers, who want to offer financing, should do their homework and protect themselves in case of buyer defaults. Get competent advice before writing a mortgage.

Sellers with good negotiating skills will do better.

Don't be insulted with an offer. Be insulted with the other people that have come through and not made an offer. Those are the ones you want to get upset with, not the people making the offer. These buyers are trying to buy your home. See what can be done to negotiate with them. Accept the offer as is, or counter.

Sellers should consider listing their property with a competent agent who has access to buyers.

Buyers may believe they don’t have to pay a realtor fee, and their offer can be a price less the commission. They are offering you less than what you are asking thinking you're not going to have a brokerage fee and that they're the one's who should save it, not you. Include the fee in your price and get the professional service.Email to a friend

• Scripts for responses to sellers have come from Howard Brinton Real Estate Seminars.

Harriet C. Murray
E-mail: harriet@casasandvillas.com.

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