It’s 9am on a Saturday morning. My husband and I have plans – sleeping late, a bike ride, dinner with friends. But all that changes when my phone buzzes with a text.
“Have you seen this?” It’s Kristen*, a friend of a friend who’s hot to buy a condo near downtown… or the beach… or somewhere in between. She includes a link to a building near St. Pete Beach. “It’s perfect! Can we go see it today?”
I click on the link and read the instructions. Open house today and tomorrow. No individual showings. Offers due in Sunday night.
My husband rolls over. “No bike ride?”
“No bike ride,” I confirm. “And possibly no dinner.”
Welcome to life in a seller’s market. Real estate and housing prices are all anyone talks about. People who aren’t looking to buy or sell are wondering if they should become real estate agents. The market is so hot! Housing prices are exploding! How can you not be in this?
This is exhausting.
The National Association of Realtors defines a “balanced market” as one that offers a six-month supply of homes. I’ve been a realtor for seven years, and here in St. Petersburg in all that time, we have never reached “balanced market” status. It’s also never been quite this unbalanced. There’ve been weeks where the inventory was below a month.
Time was, you’d find a few houses for your buyer, and your buyer would find a few more on Zillow, and then you’d pick a day and go see a whole bunch. Sometimes one went under contract after you’d made the appointment, but that was unusual. You could plan ahead, take your time, negotiate with the seller to get the best price for your buyer, and best of all, have your own life.
Not anymore.
Instead, it’s scenarios like Kristen’s. With too many buyers and too few houses, everyone looking is going to jump on a half-decent property that priced somewhere between “you’ve got to be kidding me” and “that’s insane.” We can’t wait a couple of days, or, in some cases, even a few hours. As a real estate agent, your life isn’t your own anymore. It belongs to your buyer.
And even when you find that perfect property, you’re not the only one bidding on it. Not by a long shot.
I drop everything to take Kristen to see the condo, and not surprisingly, she loves it. And according to the number of people at the open house, “oohing” and “ahhhing” and measuring the windows, she’s not the only one. We aren’t even in the parking lot when she grabs my arm, tells me how much she loves it, and begs me to write an offer that will win her this place.
Unfortunately, it’s not that easy. The $500K condo is right at the top of Kristen’s price range. It’s definitely going to go for more than that, and Kristen doesn’t have a lot of room to maneuver. Even worse, Kristen is financing this purchase… and so many other buyers have cash.
We put together the best offer Kristen can handle. A $500K sales price with an escalation clause up to $525K. $10K in escrow. An inspection period of just 5 days. We can’t afford any more, and Kristen doesn’t have the money for me to write a clause guaranteeing she will make up the difference in cash if the appraisal falls short of the sales price. Still, Kristen is hopeful.
But I’m not, and when the listing agent calls me to say the seller accepted another offer, I’m not surprised. She can’t tell me the sales price, but she does mention it was cash and the buyer waived the inspection period entirely. When it closes two weeks later, the MLS reveals the condo went for $50K over asking price.
Kristen is disappointed but not undeterred. Over the next six weeks, we make offers on eight more condos. But when our eighth offer is rejected, she finally gives us, signing onto her apartment rental for another year. Her surrender means for the hours I spent taking her to showings and open houses, working with her mortgage broker, and writing up offers, I get paid absolutely nothing.
And I’m not the only one in this boat. Buyers agents are working harder than ever, often putting in multiple offers before one is accepted. And even then, sellers are feeling stingy. Housing prices may have gone up by more than fifteen percent in a year, but they don’t see why they should pay an agent for help when the house sells itself. (Note: The house may sell itself, but it sure doesn’t close on its own.) Commission rates had been steadily going down from 3 percent to 2.5 percent; now 2 percent isn’t uncommon. Some sellers are only offering flat fees of a thousand dollars or so.
On the listing side, more agents are competing for fewer houses, and some sellers are taking advantage, becoming demanding, unrealistic or greedy. Others are staying out of the market entirely, tempted by what they could get if they sold but afraid they wouldn’t be able to buy a place as nice as their current home.
And there’s always the threat of Zillow or some other e-real estate service, offering to handle everything for the seller and buyer and leaving real estate agents out of the equation entirely. Luckily, most people like having a human being they can count on to guide them through the biggest, most stressful purchase they’ll make in their lifetime.
So why stick with real estate? Most realtors I know genuinely love their jobs. There’s nothing better than helping a buyer get their first home or their dream home, especially in a challenging market like this. It’s fun to help a seller stage their property, adding the little touches that could mean a lot more money. It’s emotionally rewarding to guide them both through the anxiety and uncertainty of the entire process. And the more people we help, the better agents we become.
What goes around comes around. A few weeks after Kristen signs her lease, she introduces me to Mike, a co-worker who is being transferred out of state. His house is a bit spartan – he’s a single guy, after all – but he takes my advice on staging and repairs. Our open house gets multiple offers, and we accept one for cash that is well over asking price. We close two weeks later.
My husband and I book a vacation.
*Names and some details have been changed to protect the innocent.
