We have buyers hoping to find the deal of the century when they come to Big Bear.
Just about every one of them.
We have more sellers thinking the market is going up.
Those sellers start to believe they can get more for their Big Bear homes because that is what is happening off the mountain.
Opinions may go into a battle mode between buyers and sellers.
The real problem, in Big Bear’s negotiations, is that sellers often don’t have to sell and buyers certainly don’t have to buy.
The fact there are more homes available can also mean that sellers aren’t selling to lower bidding buyers but opting to see if a higher bidding buyer will come along.
Until then, they keep their homes.
Oh the joys of selling real estate in a resort town.
Sellers thumb their noses at buyers and buyers will walk away frustrated.
In a buyer’s mind sellers are supposed to put their homes on the market because they either really want to sell or have to sell.
I have had buyers say to me, “How can they put their home on the market for more than it appraised for with their loan when they haven’t owned it that long? Has the market gone up that much?
No.
It is because those sellers aren’t really concerned about selling and they believe they can wait until a buyer comes along, with cash. They also believe a cash buyer probably isn’t too concerned with what the appraisal value is when they fall in love with a home.
I always try to get buyers to pay for an appraisal but my advice can be overlooked.
That is considered an emotional purchase.
When a home sells for more than the actual market value, those more expensive homes go into the pool of comparable home sales.
The appraiser on another sale will look into the title searches and on the MLS for comparable sales for the home value they are working on.
Those more expensive sales allow the market to increase.
If that magical cash buyer doesn’t come along, the seller may hold onto the home and wait to see if market values increase. If they don’t the seller will sometimes just pull it off the market for another day.
I understand economics dictate that a wise person should cut their losses if they are indeed pouring good money into a home when they feel they want to spend that money elsewhere.
They still have to pay expenses of owning that home which can add up quickly.
Some sellers will do just that.
If the property is a vacation rental, which a lot of them are, affluent people can often be write off those expenses to help offset their higher incomes.
Someone who has never owned a vacation rental income home and just wants to own a vacation home for themselves might see things differently.
They aren’t familiar with all of those additional write offs allowed for rental income homes.
The best advice for any buyer is to talk to their accountant.
We are getting into another subject all together here but “intent” when purchasing the home is vital for 1031 tax exchanges down the road.
