Changes in the Real Estate Market

real estate market Real estate is a market that will constantly change. It is completely dependent on the    public demand. While everyone needs to live somewhere, the public dictates what is  bought and for what price. It is similar to the fields of fashion, music, and any kind of      entertainment. If people can afford a certain type of item, they will buy it and if they can’t  afford it, they will do what they can to achieve financing for it.

Real estate is similar. The public decides what type of houses, features, and even the  areas in which real estate is hot or cold. Agents and investors love the thrill of real  estate. Because it is constantly changing,  every day is different from another. You either  enjoy this type of work or you hate it.  Those who enjoy it are great at what they do.  There is a level of risk and for the risk takers, they thrive on the uncertainty. An agent or  investor may have a huge deal close and they make more money than most people do in a year within one sale. In other cases, months can pass before the agent sees any type of income.

In spite of fickleness of real estate, on a daily basis, buyers, sellers, agents, and investors all become involved in a transaction in some way or another. The market today is vastly different than it was in the past and those changes can be attributed to a variety of factors.

1. The Internet has changed the way real estate is done. Clients are no longer reliant on agents for their information but they can gather it on their own. No one person has control of the situation. In the past, agents could control what their buyers would see or what their sellers would see but now the information is available to anyone with a computer.

2. The Demand has changed. The demand has gone from extravagant to affordable. People want a house they can afford and after seeing so many friends and family in foreclosure, the overall resale value of a house is more important than ever. In the past, if you liked the house, it was a in a good location for you, the school district was decent, and you could afford the house, you would probably buy it. Now, the resale value plays a bigger part in the final sale.

3. The Negotiations are tough. With the vast amount of homes available, buyers hold the controls in a deal. They are driving a hard bargain because they can. If they don’t like the way things are going, they can walk away to another similar property with better pricing.

4. The Financing options have become restricted. Underwriting used to be able to work some pretty great deals but now they are not as eager to work with those with poor finances. The banks and lenders are not allowing extensive, creative financing options as they have in the past.

5. The Values are not concrete. If your house was worth more several years ago, you are not alone. Entire neighborhoods are losing value and the homes within are falling fast. With one or two foreclosures and short sales, the housing values are not as easily predicted or expected.
These factors have changed real estate but any agent or investor worth their salt will have changed as well. In any job field, you have to stay on top of the trends and be educated about what is going on in the market. The agents who have adapted are still seeing success but they have had to change the way they do business.

When a house forecloses, it can make a seller very nervous. A smart agent will not allow their seller to get skittish about their price but will increase their advertising to make a different point. Rather than trying to compete with the foreclosure prices, the agent will try to see the other house and see if it is in good condition. If the previous owner left the house a mess, they will encourage their seller to advertise their own house as “move-in ready” and “no work required” which will appeal to many buyers. By changing their selling strategy, the agent and seller can still have a successful experience.

An investor will see the foreclosure and jump on the chance to buy the house. They have had to adapt their buying practices to include learning how to find ownership and watch for pre-foreclosure signs. If an investor can buy a house right before foreclosure, it can be easier and they can avoid the house being damaged by the angry homeowner experiencing the foreclosure. Investors have had to learn the ins and outs of banks and put the necessary phone numbers on speed dial in their phones. They can’t just buy the properties anymore for a low price but the prices are lower with more red tape. The end result is well worth the effort for investors.

Agents who want to be successful are finding more and more creative ways for their buyers to get into great properties. They may decide to work with investors on a rent-to-own situation and the investor pays them a flat rate rather than a percentage based commission. If an agent wants to get paid, they will work with the investors and do what they can to get their clients into the best property.

Real estate is based on relationships. If agents are in touch with a large network, in spite of the changes, those relationships will keep them moving forward. When an agent or investor can learn about what is going on right now and will adapt their own business to make it a success, they will reach their financial goals. Everyone still needs a place to live but their demands and lists will change as the economy and their surroundings change. This doesn’t mean there is no money in real estate anymore but rather it is available in different ways.

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