Saturday, July 31, 2021 / by Marketing Dept
Are you feeling “Buyer Fatigue”? Turns out, it’s not your imagination & you’re not alone.
Buyer Fatigue: the mental exhaustion and frustration that builds up inside a potential home buyer and can lead them into giving up on the dream of homeownership all together. It can sneak up on buyers once they’ve seen a few places, made a few offers, and have been rejected time and time again. I say “rejected” because no matter how many times they’re told that “it’s not personal”, “it’s a business decision for the seller”, it feels personal to the buyer.
The number one cause of Buyer Fatigue: listening to someone who is not an expert in the current, local market. If your aunt in New Jersey (no offense Jersey) is giving you advice because she was an agent 20 years ago, or your friend who bought for 50 cents on the dollar back in 2009 chimes in, be sure to take the advice with a grain of salt. Every market is different and in Southwest Florida, we have hyper-local markets within the market itself.
Finding an experienced, local Realtor can be the first step in combating Buyer Fatigue. You are not in this alone. Let them build a team around you. If you put your trust in your team, they will have your back. It couldn’t be more important right now who you choose to work with; lean on your personal team of experts. As Realtors, we do this every day, and this could potentially be the biggest decision and purchase of your life.
Your Realtor will be 100% focused on finding you the best property available within your budget and will work tirelessly for you, all they ask is for you to show the same loyalty. Yes, it’s a hot market but this is not the time to have 3 agents looking for 3 different types of properties for you. This will not only be frustrating for your agents, but also for you. All Realtors have access to the same MLS. We recommend that you meet with your agent, fully share your homeownership dream with them, let your lender work with you on your budget, and then give your agent the freedom to think outside the box.
Here in Southwest Florida, locals move in the Summer and most of us will use financing vs. cash. As we move into the tail end of our summer selling season, financed buyers are genuinely worn out. Who could blame them? We’ve gone from several years of having a healthy neutral market with 5-6 months of housing supply, to what feels like 20 minutes of supply (which is about 8 days). Buyers and agents are both fatigued and frustrated.
Gone are the days of spending time getting prepared to purchase while also looking for "the perfect” home.
The truth is in the numbers:
Median Days on Market: 45.5 days
Total Properties Listed: 12,354
Months of Supply: 5.4
Median Days on Market: 5.5 days
Total Properties Listed: 2,798
Months of Supply: 0.875
Our new normal is going to be around for a while, so here are the 5 best tips for avoiding buyer fatigue and getting your offer accepted.
1. If you’re getting a loan… get “beyond” prepared.
Take a deep dive and ask your lender to get you “Fully Underwritten.” What does that mean you wonder? We’re going to break it down for you right now.
You’ve selected a local lender, you’ve submitted an application including supporting documentation (taxes, w-2, pay-stubs, etc.), an underwriter has reviewed your file and may have asked you for more information which you have happily and quickly provided. This is the secret sauce. Now that you’ve done the work, your lender provides you with a legit pre-approval letter. You may be thinking, “I didn’t know there was a difference,” that’s OK... but it does make a difference to the listing agents and ultimately the seller when they are reviewing an offer.
When a listing agent sees an approval letter from a local lender and the only conditions are identifying a subject property and a fully executed contract that’s on par with cash. Typically, a pre-approval letter will have many conditions listed because they’ve done a credit check and issued a basic pre-approval letter. The more conditions on your letter, the further your offer drops down in the stack. Worst case scenario, your offer could be rejected altogether. Changes are consumer-driven and if the public (that’s you) starts asking to be fully underwritten, that will become the new normal.
2. You shouldn’t be looking at properties if you are not ready to write a strong offer.
Be ready to drop as many contingencies in the contract as you can. Work with your Realtor to shorten time periods within the contract. For example: 7 days for inspection rather than 15, 15 days for financing rather than 30. Have your Realtor find out if the seller needs/wants anything specific. For example: the preferred closing date, post-occupancy at no fee. Keep in mind your first payment won’t be due for at least 30 days, so if you give the seller 15 days with their funds to move on to what’s next for them, this can be a determining factor that puts your offer ahead and removes stress for all parties at no cost to you.
3. Don’t ask for credit/ repairs for anything cosmetic.
Yes, the flooring is less than perfect and you’d love new kitchen appliances. You can work with your lender and use a renovation loan product and finance renovations into your loan. If you need paint, flooring, cabinets, and appliances to make it your dream home you can. Plus, the interest is way less rather than if you opted to use a credit card and do a little at a time.
4. Be prepared to offer above list price.
In most situations, you don’t need to be more than $2000-$3000 over the list price. The average cost to your monthly payment is around $25.00 per month for every $1000.00. Keep your offer in line with the value of the home and consider waiving the appraisal contingency and paying the difference. Appraisers look backward and the market looks forward. We continue to see lower than expected appraisals, usually within $10,000. Work with your Realtor and your lender to come up with a plan that makes sense for your circumstances and budget.
5. Be prepared to put enough money down.
Yes, you’ve decided to buy a home rather than renting. Awesome! What do you have saved? You’ll need 1-3% of the purchase price as your good faith deposit which will be applied to the loan. You’ll also need around 3% of the purchase price for closing costs. Keep all of this in mind as you start to plan for your home purchase. Unfortunately, you can’t pull your deposit out of the mattress or shoe box in your closet and use it as a deposit. Gift money is also a great option but remember your lender needs to source every deposit. This also applies to family members who gift you funds but, they’ll need to provide bank statements that show the money has been sitting in their account and didn’t come out of her shoe box either!
Author: Suzanne McGuire - Principal Broker, RealtyQuest Inc.
Below you’ll find the stats used for this article provide by Bonita Springs Estero Realtors.
Suzanne McGuire is a local broker and top producer, with 14 years of experience in Lee and Collier Counties.