not this buyer’s market

When we found out we were being relocated to Peoria this spring, we thought it couldn’t have come at a better time: the midst of a buyers market. Sales are down, inventory has been sitting for months (even years). Prices have to drop like rocks to get anything sold.

So, from the other side of the world, we started our house hunt online. We fell in love with houses. Got our hopes up. My husband started tracking prices and imagining a virtual free-fall. As our trip to find a house got closer, he talked of crazy low-ball offers and buying a house at tens of thousands below what the owner had dreamt of pocketing. He talked to someone who touted buying a house for 90 grand less than its original listing price. My husband started looking at more and more expensive houses, while our budget didn’t budge.

Then, houses on our “watch list” started to sell. Our realtor said no one was closing 90 grand below asking. No one. And the closer our trip got, the faster houses started to sell.

We finally arrived to find a house, armed with a list of 40 we wanted to see. The first house we looked at the first day was an instant favorite. By 8am the next morning, it was under contract. With someone else. I started to feel a wave of panic. By the time we headed out for day two of looking with the realtor, two houses we were scheduled to see were under contract. Sold. She didn’t think the looming end of the tax credit was the reason. She was just giddy with the idea that maybe it’s the beginning of the end of the real estate slump. For her that’s good. For us, that’s trouble.

We quickly narrowed our long list down to three favorites. But I was sick with worry that not one, not even two, but all three would be gone before we’d even had a chance to make an offer. And don’t even get me started down the path of worry about a bidding war. I mean, you’re not supposed to get into a bidding war in the midst of a buyers market. Are you?

After going through our favorite house three times, we were ready to go ahead and make an offer. The realtor asked if we wanted to sleep on it first. No way. It might be gone by morning. We came in with an offer $33,000 less than the listing price. Then we spent the evening jumping every time the phone in our hotel room rang.

Here’s how our negotiations went. We’d made our offer and asked for three changes in the house, too. The builder said ok to two of the three changes and dropped his price two grand. We were so excited he didn’t just reject us straight out, we jumped up 13 grand. Great negotiating skills. You can imagine where it went from there. He dropped a grand. We realized we were stupid and went up a grand. Back and forth, back and forth. Till he got to his bottom number, which wasn’t so very low. Seriously. It was 15 thousand below his original listing price. A far cry from 90. But he had us. We wanted the house. We caved.

That’s how a buyers market quickly becomes a seller’s market. When you find a house that even though you say you’re willing to walk away from… you don’t. He knew he had us. And I don’t think changing our negotiating would have led to a different deal.

Maybe our car negotiations will go better.

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