Ashen faces, worry-furrowed brows, anguished grimaces, the occasional scream of agony – nope, it’s not escapees from the latest TV zombie apocalypse, it’s the tell-tale signs you’ve encountered this spring’s frustrated Boston homebuyer.
Buyer agents like Sam Schneiderman, president of the Massachusetts Association of Buyer Agents, are feeling “pain for their buyers,” he said. “At this moment, it’s crazier than it’s ever been before.”
Massachusetts home sales saw a slight dip in March compared to last year’s number – single-family sales were down 3.6 percent to 3,100 according to The Warren Group, publisher of Banker & Tradesman – and market watchers agree that choked inventory is to blame. Because demand is as high as ever.
These days, even getting in to see a property can be a more like trying to get in the VIP lounge of a hot nightclub than a scheduling a typical home tour, agents say.
“I had a buyer [tour a house on a Friday], we were the first ones in on a property, we made an offer, and the seller said he wouldn’t even be looking at it until Monday, he had so many appointments backed up,” said Angela Harkins, broker/owner of Angela Harkins & Associates in Westford. “I showed the same buyer some houses on Saturday, and at one house they [warned] me they’d got three other appointments on at the same time as me.”
So many buyers chasing so few properties is leading to not only multiple bids, but knock-down, drag-out price wars.
“I was just speaking to a MABA agent who saw 30 offers on a non-descript property in West Roxbury,” explained Schneiderman. “I was involved with one of my clients in a bidding war on a property in Arlington – a property that needed some work – and there were seven or eight offers. We [thought we’d put in the highest bid], but in the end they got another offer that was even better than ours – and we were way over the asking price. Buyers almost need to expect to pay more than asking. But how much more? It gets to be dangerous.”
Many agents are suggesting to buyers that they consider broadening their search parameters, looking a bit further afield or taking on a three-bedroom, two-bath fixer-upper which can be expanded later on rather than setting their hearts on a four-bedroom with a master suite.
“We encourage buyers to open their search up a bit, not only in geographical areas, but any physical requirements around the home,” said Kimberly Allard Moccia, a broker with Century 21 Professionals in Braintree and 2013 president of the Massachusetts Association of Realtors. “It may not have [a third bathroom] now, but there may be room for it.”
‘Throwing Caution To The Wind’
Frustrated buyers are ready to snap. Many are still cautious about over-paying after the recent crash left many homeowners underwater for years. “A well-priced home is still essential. Buyers want a good value,” said Allard-Moccia. “If you’re over-pricing your home, you’re not going to get multiple bids … Even when we do get multiple offers, they’re not always over the asking price.”
But after being on the losing end of a half-dozen bids – not an uncommon occurrence in the most in-demand neighborhoods – some buyers seem ready to capitulate and retreat to the sidelines until more properties hit the market, agents warn. Or else they may snap entirely.
“More people are throwing all caution to the wind and putting in non-contingency offers. No inspection, no mortgage. And they’re bidding the price up,” said Schneiderman.
Under Massachusetts law, without a contingency in the purchase and sale contract which allows a buyer to back out of the deal in certain circumstances (such as a property appraising for less than the contract price and a lender refusing to issue the mortgage), a seller is entirely within their rights to retain the full deposit made by the buyer – generally equal to 5 percent of the full purchase price, which in Massachusetts often means tens of thousands of dollars.
“I don’t think you’re going to find a seller or agent in this market that’s going to have a lot of compassion [for such a buyer],” said Schneiderman.
Email: csullivan@thewarrengroup.com
