DALLAS — With the inventory of homes on the market at historic lows across Dallas-Fort Worth, it would seem that sellers hold all the cards and buyers hold few. But there are challenges for both buyers and sellers in today’s wild housing market, according to Brent Germany of Coldwell Banker Realty.
Germany and his Frisco-based team sell houses across D-FW. In the interview that follows with the Dallas Business Journal, he takes us inside the conversations real estate agents are having with buyers in a seller's market and talks about challenges for buyers and sellers in the superheated market.
How are multiple offers a challenge for buyers?
They have zero power. Multiple offers used to be two or three. Now it’s 30 or 50. So you have no power to negotiate. Buyers are having to do full appraisal waivers. God bless you if you are a VA or FHA buyer. It’s going to be tough because you cannot add that appraisal waiver. There are just so many things that you can’t ask for that you used to be able to, like home warranties and sellers paying title policies. A lot of those things are out the window. At the end of the day, though, the big question is, what’s the number that wins it? And we just don’t know. It’s a guess.
What position does that put the real estate agent in?
We’re having conversations with our buyers to where we’re saying, ‘Do you feel comfortable going this high above?’ ‘Where is your uncomfortable mark?’ And then we’re still losing, and we’ll call the listing agent and say, ‘Hey, I’d love to be able to tell (the buyer) something, because they’re upset. And then they’ll say, ‘Well, the winning one was $30,000 or $40,000 higher.’ Then we’ll go back and tell the buyer, and they’ll go, ‘We weren’t going to pay that.’ And it’s on to the next one.
Sounds like a Catch-22.
It’s tough because one part of our job description is to give you sound financial advice, but if you went to your financial advisor and said, ‘Hey, I’m going to go buy a house. What do you think of me paying $65,000 more than it’s worth,’ the financial advisor is going to say, ‘Are you crazy?’ But you want a house and the comps, the appraisals, are coming in low. Thankfully the comparable sold properties are starting to accrue with the higher sales prices on them, so that’s helping, but at the same time, it’s name your number.
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