Buyers Are Tapping Out | Sellers Starting to Panic

[00:00:00]It's day 105 of trying to sell my home and my realtor suggests another open house. Gh. After 100 plus days on market and another open house is not the answer.

[00:00:10]>> Out of your mind, sir. What are we talking about here? On top of $500,000, were you looking to walk away with money and how much?

[00:00:17]>> 950.

[00:00:18]>> 950 on top of 500.

[00:00:20]>> Oh, top of 500. So 450.

[00:00:22]>> Do you understand that it's listed for $8.99?

[00:00:25]>> Yeah. Yeah. I got off for 950. I can't go 10,000 less.

[00:00:29]>> If you already got an offer for $950, why do you go 10,000 less? Go take that offer. I'm talking about your property is listed for $900,000 and the first thing you told me is that it's not selling and now you're asking me for more than what it's listed for.

[00:00:42]>> I'm in the market to buy a condo in Chicago right now and I just have to say these HOAs are out of control.

[00:00:53]Tell me why today I saw an HOA that was $2200.

[00:01:03]I'm sorry. I need you to be so expeditiously ferociously for real right now. What did [laughter] the Yeah. Y'all mind if I buy a condo and then also pay rent? What if I paid a mortgage and a rent at the same time? like who is buying these places?

[00:01:23]>> Yeah. So, the market has shifted. This is no longer 2021 or 2022. Buyer habits have changed. They have more options, more choices, and they are far more reluctant now. And sellers are panicking. Homes are sitting on the market a lot longer now, and sellers have far less leverage than they did before. So, today we're going to look at these videos and see what's actually happening with sellers and buyers. Are sellers truly panicking and are buyers tapping out? Let me know what you're seeing in your area. Are buyers done?

[00:01:51]Are sellers freaking out? Let me know in the comments.

[00:01:54]>> Full price offer. Let me make sure you understand this, too. The offer we got is $15,000 more than any other unit that has ever sold in this community. So, not only did we get the seller [clears throat] full price, but we also got them recordbreaking comps for the community.

[00:02:16]two days of not responding to us and we're asking, "Hey, we sent the updated contract. You've accepted the offer. Why haven't you signed?" They come back to me this afternoon and say, "You know, we think we're just going to try to sell this on our own. We don't need you.

[00:02:32]We're not going to sign this offer."

[00:02:34]What? Like, what?

[00:02:36]>> Yeah. This is pure greed. That seller is going to pay for that later. Not to mention a potential commission lawsuit from the broker. And even if they do sell it on their own and they're able to get $15,000 above list price better than all the comps, they're going to have to deal with that appraisal gap. If you don't have someone that understands how to navigate that, that alone is going to cause some problems. And again, we're not even talking about the momentum they're going to lose from going back on the market and going back on the market by themselves. People underestimate that part when you list a property, that first early momentum. The reason they probably got 15K was simply because they had multiple offers and the multiple offers competed against each other in order to raise that price higher. So, you're just basically throwing all that in the garbage. So, yeah, this was a very, very poor decision by that seller, but they're going to find out the hard way.

[00:03:27]>> I just got a call from an agent that my buyer's offer is being rejected by the seller. And to me, for one of the most craziest reasons, let me tell you, >> it's almost a 1.5. It's on a million half dollar deal. and uh and the seller is rejecting my buyer's offer. Why?

[00:03:44]Because when we were looking through the property, when we were walking through the property, my buyer had mentioned that they're going to renovate the kitchen. And apparently the seller is in love with their kitchen and they're like, "Why would they come in and break down what we have?" To me, that's kind of absurd. and a and you're a seller.

[00:04:03]You're selling your home. The buyer's paying you um the money that you're looking for.

[00:04:10]>> Yeah. So, I mean, this isn't greed. It's purely emotional. And I get it. I've dealt with homeowners like this. I've dealt with buyers that want to change everything. I mean, most of us just want someone to buy our stuff that's going to appreciate it, right? But this is a financial mistake. that kitchen that she spent all kinds of money on that she loves is now going to be more expensive because it's going to show up in the net of that sale simply because she rejected the offer of this buyer that's willing to pay for that home. So, the next buyer that comes along that's willing to keep the kitchen intact. Sure, it makes sense she'll sell it to somebody that appreciates that kitchen the same way she does, but she may take $50,000 less on the home because of it. They have the bag of money. Let them have the sledgehammer. with that extra $50,000 that you might end up taking away from that sale, you could use that towards your next kitchen or whatever you want.

[00:04:59]And this brings up a actually really good point. If you're a buyer, assume that the seller's always standing in front of you while you're at the showing. Even if nobody's there, assume you're being recorded. Assume that there's some type of audio recording you. Treat it like the seller's there.

[00:05:13]Compliment the property as if the seller's there. Or don't say anything.

[00:05:17]And then when you get outside away from the door, ring bell, walk down the car with your agents and you guys could give the house funny nicknames. You could trash it. You could say anything you want about it. But don't ever assume that there's not video or there's not some type of audio recording somewhere in the house because there probably is and you will never know about it. And when you go to submit that offer, they may hold what you say against you.

[00:05:41]>> I'm just going to say it. My biggest pet peeve in real estate right now is when sellers say, "Don't send me your low ball offer." When really that lowball offer is the price it should be listed at. Because where are you getting your comps from the remodeled house next door? I'm sorry. You don't get just to list it at a $20,000 discount when your whole house hasn't been touched since 1985. Your house has been on the market for a 100 days with two showings. Maybe those lowball offers are trying to tell you something.

[00:06:09]>> Yeah, this is a negotiation mistake.

[00:06:11]That kind of response is an emotional reaction. And your emotional reaction is going to trigger an emotional reaction from them. Even if it wasn't intentional, you won't get a higher offer. You're going to get no offer.

[00:06:22]Negotiation 101. Say less. Wait for the offer to come in. Look at the full terms. Review it with your agent. Decide how you feel about it. Then how you going to respond. And if you're not happy with it, give it a day or two.

[00:06:34]Often silence and time is your best negotiation strategy. So when it makes sense, use it. So, here's a comment from Ghost Rider. When I look at houses on Zillow in my area, almost all of them were last sold around 2019 for less than 150,000 and are now selling for around 400,000. When you look at the picss, they look like they haven't even been updated since 1980s. Absolutely insane.

[00:06:57]Then another comment said, "The problem is sellers are asking for more than what their house is worth." And Pantherra said, "When a house sold in 2022 for 300,000K and is now listed for 700,000, they don't sell." What do you guys think? Do you agree? Let me know in the comments.

[00:07:13]>> The seller rejected an offer that was $1,500 [clears throat] less than asking price. Cash offer with two weeks to close. That's ridiculous. sellers, if you get an offer that is that awesome and it's $1,500 less than your desired asking price, you're being ridiculous to not counter it back. It's one thing to counter back at full price. It's quite another to reject the offer outright and then wait around for another offer to come in.

[00:07:47]>> Yeah, rejection should never be in your vocabulary when you're selling a property. You want to always leave the door open for them to come back and just the word rejection will kill that. So the problem with just using even the word rejection, it will trigger a emotional response. They'll take it personal. If you reject them, they may simply say, "Okay, we're just going to move on to the next house." They may look at it as, "You're not taking this sale seriously. $1,500. You're not even going to counter us." That's going to be the rational response from anybody that sees a rejection from an offer of $1,500 below it. Like she said in that clip, even if you counter at full price at the list price, counter. It doesn't have to be acceptance, you could counter what they provided to you. You know, sometimes the best way to get a negotiation to come together is make the other party feel like they won. So Elizabeth said, "It's the price.

[00:08:39]Sometimes you take a loss." And Marin said, "Selling season is year round if it's priced right." Hawkeye commented on, "Yeah, it's a tough market. That's what happens when you paid more than it's worth in the first place. You overpaid and now you're trying to make the new buyer overpay to save yourself from breathing with a snorkel.

[00:08:58]We have been trying to buy a house for the last 3 months and when I tell you the housing market is so delusional right now. I'm not even kidding. The last property we put an offer in on the house has been on the market for like 240 days with no price reduction. and we put in an offer for below asking because it is not worth the asking price. That's why they have not sold it. And um they just said no, no counter, nothing. They will not sell for below asking, which they're never going to sell. Like no one is buying the house for that, especially when it needs an immediate like $20,000 worth.

[00:09:37]>> Yeah. This is why buyers are giving up.

[00:09:38]mortgage costs, interest rates, closing costs, repairs, everything's getting very expensive for everybody and buyers are feeling it. And I don't see it really changing much in the near future.

[00:09:49]So again, this isn't 2021 or 2022 any longer. Buyers have options. The market's shifting. In some markets, sellers are starting to panic because houses are staying on the market a lot longer. They're not selling as quickly.

[00:10:02]Buyers are truly starting to tap out and sellers have a loss in what they're doing. So, what gives? There doesn't really seem to be a clear end in sight.

[00:10:10]It seems to me that both the buyers and sellers are dealing with the same impact. So, it becomes this kind of tugof-war. Buyer, seller, who's going to win? So, here's a comment from Jim from Austin, Texas. A house in my neighborhood was listed for 2 years ago at $590,000. It finally sold this year for $360,000.

[00:10:28]Wow, that's a big difference. Just because these sellers overpay doesn't mean buyers need to overpay. Do you guys think it's a bad time to buy a house?

[00:10:36]Would you buy a house in this market?

[00:10:38]>> This is a nightmare house.

[00:10:40]>> New construction that started falling apart within a few months.

[00:10:44]>> And the problem continues.

[00:10:45]>> Windows that bowed out.

[00:10:48]Walls that leaked with rain or snow.

[00:10:51]>> We could smell the gas.

[00:10:52]>> An oven tagged as >> an explosion hazard.

[00:10:56]>> Then this water the last place it should be.

[00:11:00]>> This was a significant volume of water.

[00:11:02]And finally, the structure of the building itself discovered by a city engineering review.

[00:11:08]>> The beam over the garage door high enough to withstand a windshare event or a high wind event. I can't use my garage. I can't use my shower. I can't use one of the light fixtures. I can't use my oven.

[00:11:20]>> Do not buy new construction. I repeat, do not buy a home that is new construction. I'm going to tell y'all a little story. I bought a home roughly seven seven and a half years ago from the company Dr. Horton wor one of the worst builder company building you know development companies there is out there. They put these homes up fast and cheap.

[00:11:50]Two maybe three three years in the house already has a a major uh plumbing problem. I take a shower one day, then come downstairs and almost bust my ass in the kitchen.

[00:12:05]Water everywhere. I'm like, damn, what's going on? Like, I ain't leave the sink running or nothing like that. The dishwasher ain't flooded. What's going The washing machine ain't flooded.

[00:12:15]What's going on? So, I'm looking around scratching my head and then I look up. I see a huge water stain in the in the roof in the ceiling. So, I I'm tall enough. I take my finger, poke right through it. Water, water, water, water.

[00:12:33]Just dripping. I like, damn, what's the what the hell? Had three plumbers come to diagnose the problem. Three.

[00:12:43]Every last one of them came in there and said, "Who built this house?" It said, "Dr. Horton." They said, [laughter] >> "Yeah, I mean, at first, new construction seems like it's a great deal. They're able to give you incentives, buy down rates. They may give you a discounted upgrade, extra credits, but you have to remember builders are not charity. They're for a profit. And the way they do that is they build at scale huge numbers of houses in large communities. And Dr. Horton's the biggest builder in the country, one of the top three. I mean, I could go on a whole rant about how Dr. Horton, Pyroup, and Lenar are dominating the building industry and certain things they're doing is preventing smaller builders from competing. They're basically becoming an igopoly or pretty close to it. They're definitely using monopolistic behaviors to do this. The point is they're building at scale in and the buyers, the new owners of that property are the ones that take the burden of that. You get a one-year warranty, but I mean, who cares? Most of the stuff is that's going to be a major problem is going to happen after that one-year warranty. So, new construction doesn't equal a superior property. It just looks shiny when you move in. Now, I'm not against new construction. It makes sense in a lot of circumstances.

[00:13:58]It sometimes is cheaper than buying a pre-owned property, but if the quality of that construction is worse than that pre that pre-owned property, maybe it's not the greatest deal. So, do your research. Make sure you're you're checking the builders. Look at the communities in the area. Danielle uh said, "Homes are made of garbage these days, and people don't want to pay 30 to 50 years for garbage that took five guys two weeks to throw together." Joe said, "New houses are garbage." Ry guy said, "Sellers be like, "I overpaid for this De'R Horton shack 2 to three years ago, and now I'm upside down in it." So, you pay the price for my mistake. And then Michelle said, "I told my kids to buy a house that's older than 20 years because the quality has fallen so much." Also avoid HOAs. Yeah. I mean, you have to be careful, right? What do you guys think?

[00:14:45]Would you guys prefer a property that was pre-owned or would you buy new construction where everything's brand new? What's your preference? Let me know in the comments.

[00:14:54]>> This is what our brand new house. It's flipped. It was built in like the 19 something, I don't know, and then it was just flipped this last year. But this is what a brand new house looks like from this seller. Mind you, he has an LLC and he does this to multiple multiple houses. We're going to start slow. We're going to start nice and easy. Yeah, just cut the trim in the middle of everything. You know what? I'm not even mad about that. I can erase that again with the trim. Our washer, like our dishwasher and our oven didn't work because I hooked it up incorrectly. How do you do that? If that's if this is your job, how do you do that? We vented the sink, but it still backs up a little bit from our dishwasher and our clothes washer. This is the only window that opens. Who needs windows? It's Texas.

[00:15:43]Who needs them? Now, I love that this is black, but why did you There's the You split the cocking down the middle. How does that even work? And why are you damaging my force?

[00:15:57]Also, good job. Yeah, I mean I love her personality. She's taken this well, but I also get a feeling she probably didn't do an inspection and this almost feels like it was a sight unseen purchase cuz a lot of some of these things that she mentioned should have been caught in not only the inspection, but you could visually see these things are wrong. So, I'm I'm curious on what the situation was when she bought it.

[00:16:23]>> Good job. You know what they say, if you cut a board too short, just just it. Just it. And now about the windows. They knew that they broke the window. So, they're not going to seal the door all the way shut so we can get a nice breeze and we didn't seal the bottom either. And who needs locks?

[00:16:44]We live in a great neighborhood. You don't like the color of the bathtub?

[00:16:47]Well, we'll just paint it so that your body gets paint on it whenever you take a bath. Now, this is partially fixed, but you want to sit on the toilet and not go on a roller coaster ride. Don't come to my house. They didn't bulk down.

[00:16:58]They just cocked it. And they broke the cast iron underneath it. So that's cool.

[00:17:01]You want to take a shower? Okay, sure.

[00:17:03]Yeah, just make sure you don't pull it too hard. Just put it back on. It's fine. Brand new vanity, they said.

[00:17:11]Okay. You want a his and hers bathroom?

[00:17:13]I got you. But you're just not going to be able to open the drawers all the way. Now, I'm a girl, okay? And I think I could do that better. But don't worry, you're not going to get any bugs in the house because we have holes for them to come out. You want a brand new garage door?

[00:17:30]Well, we broke it while putting it in.

[00:17:33]Sorry. Storms in Texas.

[00:17:37]Well, hopefully your siding doesn't fall off.

[00:17:40]Sorry. I haven't seen you in a while.

[00:17:42]Yes. Hi. Now, again, that was only some of it. We fixed a lot of it. Um, but I'm about to get his LLC and report him because nobody should buy a house like this thinking it's brand new.

[00:17:59]>> Like I said, she's being a good sport about a crappy situation. This is a perfect example of the whole lipstick on a pig when you're dealing with fixer uppers or flips. This is likely a result from these HGTV shows. The problem is you never know what's behind the walls.

[00:18:14]What did they cover up? What did they paint over? You have to be careful with these types of properties. You don't know who did the work. You don't know what they knew about it prior to the property going on the market. And don't rely on what their real estate agent is telling you. When you buy these kind of properties, it's a gamble. You don't know what you're going to get. They're not doing this as a favor to anybody.

[00:18:34]This is for profit. They take shortcuts.

[00:18:36]They do it quickly and they probably use the cheapest products that they could get on the market. And buyers are starting to see this now and they're just saying absolutely not. And I don't blame them at all. So, this comment said, "Those HG TV shows about flipping houses convince people they could be real estate muggles with just a coat of paint and simmon buns in the oven."

[00:18:55]Anime said, "I randomly look at houses for sale. I found one that was bought in 2024 for 350,000. Now it's listed for 800,000. It's crazy to think someone can slap gray paint and flooring into a house and think it means they should make double for what they bought it. I seriously hope these house flippers quit. They're taking away starter homes from people." Good point.

[00:19:17]>> Oh my god, what we found. First off, we're in San Diego and it's been really popular for developers to come into San Diego, buy up these homes, do shitty flips, and then put them back on the market and hope that somebody just buys it. And this slimy, terrible development company, they got us. As we were doing inspections, we got all our disclosures back and the inspections on face value were fine. There was nothing super alarming until we got the disclosures back. I'm not a real estate expert, so I do not know what a disclosure technically means, but from my understanding, it's basically the the state of the house as per whoever lived in it. So, it'll say like, "Oh, this is in this condition. this is in this condition, this is in this condition, etc., etc. You have to disclose all of those things when you're selling the home. As developers, they can write I don't know on every one of those things because they've never technically lived there. So, we got the previous disclosures from the original owners of the house. And guys, this house had black mold in it. All over it, under the entire foundation.

[00:20:38]And then our real estate agent did some more digging. The development company that is listing this home has been sued multiple times all across San Diego.

[00:20:49]They've also changed their name three times, so you could no longer find the previous name that they were previously sued under.

[00:20:57]>> Yeah. So, I can't speak to her state. I don't know exactly the state disclosures there, but here in Illinois, you can't just not disclose. Even if you're an LLC, if you are an entity, own that property, have knowledge of the problem, it has to be legally disclosed. If that developer knew there was black mold, they legally have to disclose that to the new buyer. Period. If not, they're going to be open to a major liability on that. And the burden again always falls on the new buyer. And this is why buyers are kind of done with all this. but they don't want to spend $20,000 on repairing the things that they thought were already done. I mean, I don't think anybody would want that. Sounds like a ton of homes got purchased as investment properties instead of wanting to live in them. Scalpers are scalpers, whether it's a home or Pokemon cards. Okay, fair. And then Eric said, "People used to buy a house to settle down and raise a family. Now people are buying houses as short-term investments so they can use the equity to buy another house.

[00:21:49]Shows about flipping houses, passive incomes, and investments is driving this spiral. I mean, there's huge interest in definitely buying properties as investments and why we often hear about the institutional investors. That's a problem. But it's the mom and pop investors that make up the majority of investor purchases. And they're not all created equal. Some are legit. Some are just doing exactly this kind of stuff.

[00:22:11]So, let me know in the comments below.

[00:22:13]Are you seeing these types of investors in your marketplace? Are there a lot of issues with them? I'm curious of h how widespread this is, cuz I see it often.

[00:22:21]People are underwater and they can't afford to sell their house. I hate to say it, but I think short sales are coming back. I can't tell you how many conversations I've had with sellers in the past couple of months who want to sell their house and they can't because they owe more than it's worth. The market has shifted and people who bought in 2021, 2022 with small down payments aren't able to sell and they aren't able to rent it either. I really, really hope she's wrong, but she's probably not.

[00:22:50]They probably are coming back. Now, it's not 2008. We're not in that same market.

[00:22:54]We're not going to see that type of market happen again. Most likely not.

[00:22:59]So, it's not going to be at that level.

[00:23:00]But, they're definitely coming back. But with all this inflation, these skyrocketing prices, taxes, insurance, just cost of living just going up so fast in such a short amount of time and wages aren't keeping up with it. If you're one of those unfortunate situations where you bought your house recently, like in the last few years, and you have to sell it, you could be stuck. You could be owing more on it than it's currently worth. Right now, they're selling where people think they're delusional prices. Sometimes that's just them not having a choice, meaning they either sell it for that price or they have to bring money to the table. And if they don't have the money, then the only option is a short sale.

[00:23:37]That requires a hardship. And that's a completely different conversation. But for sellers sake right now, for the market's sake, I hope these aren't going to come back in large numbers. So, Kelly said, "Many sellers can't price their homes right because they overpaid to begin with. They would have to bring money to the table at closing." Correct.

[00:23:53]They're either going to have to bring money to the table, not sell, or short sale. Short sale may or may not be an option. And then Ally said, "Selling your house for less leaves you with not enough money to buy another one. Prices are still too high everywhere." And Blue said, "Attempting to sell a home you bought just two years ago means something went terribly wrong."

[00:24:10]>> And I do love this house. I love everything about this house, but I've come to the realization that I can't stay here because I can't afford to.

[00:24:22]And it's not that I can't afford the house payment. It's because there's so much wrong. It has just been one thing after another after another. and the list of things that I have to fix is tens of thousands of dollars long.

[00:24:40]The one thing I would say is to just be financially and mentally prepared for the fact that owning a home can completely financially ruin you. And that's where I'm at today. This house has quite literally bankrupted me.

[00:24:57]>> Yeah. I mean, one of the biggest costs that you don't ever see coming is maintenance. Hidden maintenance. And then when you're hitting that 20, 30, 40 year mark, these things stack up. And the big ticket items like the roof, the HVAC, the windows, they'll stack on you and those costs become unaffordable for a lot of people. And unfortunately, buyers are becoming hyper aware of this.

[00:25:17]They're reluctant to buy houses that need these extra things. They're expecting a lot of these things to be done before they purchase. If you don't do it, you lose leverage when you try to go sell the property. And unfortunately in that case the sellers price is going to take the biggest hits. So buyers are at their limit cost-wise affordability.

[00:25:35]Sellers are stuck and both sides are suffering from the same affordability constraints that exist right now in our market. Again creating that tugof-war between the two parties and this is why sellers are panicking and buyers are tapping out. What are you seeing in your neighborhoods? Are sellers still struggling to sell? Are you in a tight market like mine here in Illinois where there's not a lot of inventory, so sellers are still doing fairly well? Let me know in the comments what you guys are seeing in your area. And if you're looking for a realtor or happen to be in my area, all my contact information is listed below. Thanks for watching. See you next time.