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Location, Location, Psychology?
It has always been said that the three most important things to consider in real estate were location, location, location. 
I come across so many houses listed for sale and the agent will start the description with “location, location, location”. Sometimes this is the default language if there is not a satisfactory substitute for the property’s features. Many times an agent is just verbally challenged. Either way, nobody will argue that location is important. But what else is going through the mind of a homebuyer as they look for a home to purchase and consider making an offer?
A Slower Market for Sellers Is Also a Slower Market For Buyers
In a slower real estate market most buyers assume a house will be around for a while. No need to rush out and make an offer, lets just take our time and see what happens. Before making an offer to purchase, a home buyer has many factors to consider. A slower market will tend to make buyers more contemplative.
- Is there a chance the price may go down?
- How motivated is the seller?
- If I wait a few weeks, what will the interest rate be?
- With the new lending requirements, I do not have enough for a down payment.
- I just cannot make up my mind between this house and the one down the street.
- No sense of urgency, time is on our side.
- I don’t know if now is a good time to buy.
- Prices haven’t really come down much.
Now versus Then
A few years ago when everything in the housing market was selling, buyers only had one thing on their mind. That was “make an offer today” because there was a good chance a house may not be around tomorrow or it may have multiple offers. Then the price could go up. Today’s market is much different. Too many things to consider. Just like going to TGI Friday’s for dinner, too many items on the menu and it is hard to make a decision.
In our current market environment, properties that offer value are selling and selling fairly quickly. Buyer’s need to recognize value when it presents itself. Problem is in this market people read the news and think that there is that one hot deal out there and this could be that motivated seller willing to accept a 25% discount. Even though the market is decidedly different than 18 months ago, many similarities exist. Many psychological similarities. Until you loose out on a couple of offers you may not understand what it takes to produce a winning bid. This is true in an up or down market.
