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Friends of Friends Don’t Beget Panic

Three people I know recently put their homes up for sale. Their homes sold within a week of being listed. Like compound interest, tales spread and the refrain, “things are selling quickly” was all that was talked about in the sellers’ respective circle of acquaintances.

The real estate industry does nothing to debunk these stories because it helps the real estate industry. It creates panic in home buyers. Panic is good for the real estate industry. It is good for sellers. It is not good for buyers. Tending to such emotions as well as helping people manage a wise purchase is why we do what we do. We only work for home buyers. We don’t tell stories.

It’s important to remember that three (or five or seven or…) anecdotal tales do not make a market. At Homebuyer Associates we continue to hammer away our message that information should drive the purchase of a home not emotion or anecdotes.

You know I consider buying a home to really be about the use of money – not buying a home. A home is where you live – it is not an investment in the truest sense of the word – but it can create equity which can add to wealth.

I remain baffled by why the general public doesn’t take more of an interest in how their real estate money is spent. Buyers continue to use an aunt or uncle’s friend or someone they bumped into at an open house or an agent who doesn’t work for them (as defined under state statute).

This is real money – your money – and how you spend your money affects your wealth. I can make this case about home buying and investing – the two primary areas where people put their money at risk. Life may not be better with wealth but it is easier.

I was struck by this as I re-read what is considered the “bible” of investment books, Benjamin Graham’s The Intelligent Investor. A few gems are worth quoting and to imagine how they might play into a purchase of a home. Look for that in Part 2, later this month, of this newsletter but for now let’s get back to “things are selling quickly.”

Even within the tales, the stories can differ. For example, below are the average days on market for various price categories for single family sales in the four-county Milwaukee Metro area.

Price: $100,000 – $150,000 Ave. Days on Market 91
Price: $150,000 – $200,000 Ave. Days on Market 91
Price: $200,000 – $250,000 Ave. Days on Market 89 Price: $250,000 – $300,000 Ave. Days on Market 95 Price: $300,000 – $350,000 Ave. Days on Market 121

Yes, some homes sell quickly but generally it is the process that will dictate whether or not you locate a home and are successful with your Offer. It is rare that our clients don’t get the home they want. It happens but it is rare, very rare.

In the rare case a client does not have their Offer accepted, it is most often because another buyer offered more than the home may have been worth. A close second would be if our client wanted to do the negotiation “dance.” Start low with the seller returning high while someone else buys the home during the dance.

Because we value our market analysis approach to home buying we prefer to avoid the dance. I know of no other agent/company in the four-county area that takes our approach to home buying. It’s why our clients don’t miss out on homes or at least don’t miss out for good reason and why our client appraisals are often higher than what our client paid to buy the home.

Buying a home should be about data not a story. If you want a story, read a book. If you want to buy a home, let’s have a cup of coffee and we’ll talk.

Thanks for reading.

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Homebuyer Associates
1835 N. Riverwalk Way
Milwaukee, WI 53212
Phone: 414-254-4129