If there’s one mantra that you’ll hear from the real estate community, it’s that “Real Estate is local.” We don’t want you looking at what’s going on in California and Arizona and extrapolating that the same behavior is happening in your market. Because most likely, it’s not. Each market reacts differently based on the local economy, housing stock, demographics, and a host of other factors. Unfortunately, I believe there is another equally important phenomenon that occurs in real estate, but I don’t think it’s talked about much, and I believe it should be. It’s what I like to call “independent situations.” Technically, independent events.
What exactly are independent situations? Well, independent situations in real estate are exemplified when, during the same week and in the same town, I have a buyer sign a purchase contract on a property for 88% of the list price and another buyer get into a multiple offer situation. It really makes people scratch their heads.
Another example. You hear your co-worker bragging about a super deal that they got on a property and you’re wondering why the sellers you’re dealing with just aren’t giving in on their price. It could be because the sellers your co-worker was negotiating with had their house for sale for a year and a half. You’re putting offers in on newly listed properties and trying a low ball strategy.
I like to advise my buyers that putting an offer in on any property is going to be an independent event. How these specific sellers react will be different than another seller on a different house. No two situations will be the same. So if they’re hearing real estate stories from friends, family, and co-workers, they need to realize that those were independent occurrences as well.
As a buyer, just focus on the property you’re interested in. Block out all of the examples about “fabulous deals” you’ve heard about from outside parties. Look at the relevant information related to that specific property; days on market, other competing homes in the price point, condition, location, etc. Listen to your agent’s advice, given the data provided and the other houses you’ve seen. And just realize, if this property doesn’t work out, there’s another one out there and it will be a different scenario than this one.