Terms like “buyer’s market” and “seller’s market” are frustrating to me because they’re often used thoughtlessly. These terms are useful to describe large-scale trends, but they lead people to make faulty assumptions about individual transactions. For example, when buyers hear “buyer’s market” and read an article about how someone got their home for $100,000 under asking, with $20,000 in seller concessions and a rate buydown, buyers often think they’re going to have exactly the same experience.
Articles are written to get attention (including this one!) so they use dramatic examples to illustrate their point. If I’m writing about how Los Angeles is now a buyer’s market, I’m not going to use some banal example about how someone got a decent deal in a plausible neighborhood, I’m going to talk about the buyer who got the seller to pay for a full seismic retrofit and got $500,000 off the list price. The problem is that now buyers in Los Angeles who read my article won’t be satisfied until they get a screaming deal so good it might end up in the LA Times.
The reality of individual transactions in a given market is often very different from the stereotypes about that market, especially since the news describes something that’s already happened. Once a market becomes widely publicized as a “buyer’s market,” then you have a bunch of new buyers enter the market reacting to that news and competing with each other. In Portland recently, I’ve seen a lot of listings sit on the market for months, reduce prices a few times, and then sell for significantly more than the last listed price, which likely indicates a surprise, last-minute bidding war.
Portland is widely categorized as a buyer’s market currently, but this ironically has resulted in more competition for certain properties, especially detached single family homes in the metro area. An agent I know had two listings that sat on the market for months, he advised price reductions, and then suddenly both properties had unexpected bidding wars. One of these actually ended in tears, which is perhaps a story for another article.
My point is that buyers and sellers should be aware of larger trends, but also recognize that their individual experiences may be completely different. Stereotypes about larger market trends are not the most important factor in getting the house you want; it’s far more important to find out as much as you can about the individual seller and their motivations (if you’re a buyer). An agent who can quickly establish rapport with listing agents and gauge the seller’s situation will massively influence your transaction. If your agent can quickly find out if the seller is under contract on another property, if the other offers are serious, etc, you’re in a really good position to make the strongest offer. I’m often shocked by the amount of useful information you can get from a listing agent just by having good rapport with them. Of course, if you’re a listing agent, you should only share what is advantageous to your seller and what the seller gives permission to share… but a good buyer’s agent can obtain a surprising amount of information if they know what they’re doing. 
An agent I know recently had a listing agent tell him not to offer more on a property because his was the strongest offer and the seller just wanted a rapid sale. You really never know what good intel you can get just by being easy to get along with and forming a quick bond with other agents.
Just to illustrate other random factors that have a huge influence on a transaction if you know how to look for them, I’ve had very good experiences with corporations listing single-family properties who want a quick sale. I was personally involved in one of these transactions, and it was the smoothest real estate experience I’ve ever had. Another was purchased by a friend of mine.
Both of these situations were strikingly similar; they involved a corporation listing a home that had been used as an office. Both of these properties had been well-maintained, but not extravagantly so–that is, the basics were solid (new roof, new plumbing), but the kitchens could have used some updating. More importantly, these homes were being sold by someone who did not own them personally, so they had little emotional investment in the transaction. These were representatives from the corporate owner, and the best offer you could give them was whatever it took to get the transaction over with ASAP so they could get on with their day. These transactions were both unbelievably smooth, and both were in extremely competitive neighborhoods. Both of these properties sold for about $150,000 below market, which legally qualifies as a screaming deal.
My point in taking you on this little excursion is that real estate transactions often do not fit into larger market trends. Each transaction is its own universe, and each market is made up into so many micro-markets that function independently. Timing your sale or purchase based on news from what happened last quarter is not the most essential factor in getting the best deal. It’s much more important to have an agent who has experienced a wide variety of transactions, and who can quickly gauge the temperature of a transaction. Remember, market data is important, but it’s also so last season!
The Danger of Buying in a Buyer’s Market
