Longtime managing broker Don Prigge remembers a time not too long ago when home sellers were smiling.
“Now if a seller smiles, it’s because they are just glad to be rid of the house,” said Prigge, who is at the helm of Crystal Lake’s Baird & Warner. “It’s the buyers who are laughing. It’s called a buyers’ market.”
Homes can be bought for a bargain, interest rates are at historic lows, and an overabundance of homes have flooded the market, so buyers can afford to be picky. And many of them are.
Those looking to buy a home can afford to play hardball and wade through a number of homes before choosing.
“There’s so much to see today, and [buyers] want to see it all,” said Susie Covey, a Coldwell Banker Realtor in Crystal Lake. “ ... I’ve shown as few as four houses; the most I’ve ever shown in a day is 16 [homes].”
This also makes competition fierce for those trying to sell their homes.
Sometimes, sellers are losing money. Sometimes, it’s sweat equity. But most of the time they feel like they’re losing.
The Re/Max sign on the Fitches’ Algonquin property had the words “in contract” dangling from below the for-sale sign. The next day, the sign would read “sold.”
The Fitches’ upcoming move was bittersweet. The couple is separating and were moving out of their home on Glacier Parkway in Algonquin.
On moving day, boxes were packed in nearly every corner. Black markers were used to identify boxes that were placed into the garage, awaiting the movers who were to arrive the next morning.
“You’ve got to be flexible,” Jodi Fitch said. “I thought this was it until my son went away to college, but, unfortunately, circumstances change.”
Her husband, Charley Fitch, added: “Don’t sell unless you absolutely have to. To sell, you have to be realistic.”
The Fitches took a significant hit when they sold their home, which they bought for $275,000 seven years ago. They put about $50,000 worth of upgrades into the home.
They sold their 2,400-square-foot, three-bedroom, 2½-bathroom house with a finished basement, media room and hot tub for $235,000.
Initially, the house sat on the market, listed for $245,000 for about six weeks, before they dropped the price to $235,000.
When listing a home in today’s unsteady market, it’s key to set the list price appropriately, based on comparable homes in the market. A lot of times that can mean stress, or even tears, especially when the price is significantly lower than what the seller hoped.
“What I find more often than not is sellers are very prepared for what I’m telling them,” said Re/Max Plaza in McHenry Realtor Kim Keefe, who did not sell the Fitches’ home. “Oftentimes they have a number in their head already for the range I’m giving them. ... It’s a lot easier to share the news knowing they’re not going to fall of their chair.”
But unlike a lot of homes on the market right now, once the Fitches’ home was priced right, the house flew off the market. It was listed for two months before the offers came rolling in.
The first offer didn’t work out because the buyer couldn’t agree to the Fitches’ terms. But the very next day, a young newlywed couple made an offer on their dream home.
“We were not prepared at all for a sale in two months,” Jodi Fitch said as she assembled more boxes.
She was visibly upset as she packed up her belongings and took what would be one of her last walks through the cozy two-story home where she and Charley raised their son.
“It’s been a great house,” Jodi Fitch said, tears welling up in her eyes.
Courtney and Quinn Ewert have been married for a little more than a year. Before even looking at a single house, they got a budget together.
A smart move, most real estate agents say.
“I don’t want to show a house out of their price range and they’re disappointed [because they can’t afford it],” said Covey, who did not represent the Ewerts.
It’s equally important to shop for lenders, because as Prigge put it, securing a loan is not as easy as it once was.
“There was a time not too long ago, if you had a pulse, you got a loan,” Prigge said. “Now you have to have not only superior credit, you need to jump over a number of hoops to get [lenders] to loosen their hands over this money.”
Because they both work during the day, the Ewerts devoted most weekends to looking at homes. They looked at 15 to 20 before finding their dream home. Or so they thought.
A home inspection revealed issues that were deal breakers. Plus, the home was not a short sale just yet, and the seller’s bank couldn’t agree to sell the home for $15,000 less.
“For us, it wasn’t the house we wanted to put an extra $15,000 on,” Quinn said.
Undeterred, the newlyweds continued to look at homes while they lived with a friend in a tiny Crystal Lake apartment. Their patience paid off.
“The buyer has to understand that they have to be patient,” Covey said. “They’re patient for the first month or two, but six months down the road, your patience starts to run a little thin.”
Courtney and Quinn Ewert recently closed on their first home: an 1,800-square-foot, two-story home with three bedrooms, two bathrooms, a finished basement, a two-car garage and a deck. They paid $165,000 for the home on Candlewood Trail in Cary.
“I think with us being patient, it allowed us to look at what was out there,” Courtney Ewert said. “I think it was good to take our time.”
They bought a short sale, and like a lot of other depressed homes on the market, it needed some TLC before the couple could move in.
The short sale process is not easy. The paperwork can take months to get approved by banks who have to agree to a settlement on the seller’s loan. The Ewerts experienced the anxiety that comes with waiting for bank approval.
“It was frustrating, because you don’t hear anything back, and you don’t want to get your hopes up because you know other people are going to look at it,” Quinn Ewert said. “You don’t know if anyone is going to put offers in.”
Realtors are urging buyers and sellers to be educated on today’s market so both parties don’t get disappointed. It’s helpful to know what’s going on in the market, what short sales and foreclosures are doing to the market, and what types of loans are available.
As Covey put it, “this is not five years ago, this is the new market.”