You know what smart people are doing right now? They aren't buying real estate. They aren't looking around with some broad aim, approaching real estate all willy nilly like. They aren't looking at a market and deciding to buy something, anything. They aren't making rash decisions. They aren't considering real estate a lock anymore. Smart people? They're the ones with reasonable expectations of future value even as they diligently hunt down current value. Smart people, it seems, are careful people.
Yesterday I sold a house in Geneva National to one of these smart people. In Geneva National, if I'm owning a residential home, I want to be in very specific areas. I either want to be on Saint Andrews, Masters, in the Barclay Club, or if nothing else is available and there is a high caliber gun pointed at my head, the Geneva Club. I don't want to be anywhere else, even though I'm leaving out some of the pricier, newer enclaves like the Woods and the Savannah. So if those streets are my goal, the sale yesterday on Saint Andrews met my personal preferences quite nicely.
Since I wasn't the buyer, I suppose my own personal preferences matter little, unless you consider that my own personal preferences tend to form based on opinions of value, and those opinions of value are seldom too far off the mark. The home closed at $363k; a tidy reduction off of the $429k list price. The home was previously valued in the mid to high $600k range during the peak, so this reduction of perhaps 40% or more is nice. The negotiations on this home were somewhat interesting, as the span from initial offer to ultimate signed contract ate up as many as 45 days. Maybe more. In the end, an out of state owner acquiesced to an out of state buyer.
There's something to be said for steady negotiating pressure spread out over a very long period of time. This strangle approach can work, and it can also backfire. I put together a deal in Oakwood Estates the other day, and the negotiations were moving along (on behalf of the buyer) as planned. All was well. We were losing individual battles but the war was ours. We were days from marching to the front lawn of that old house and planting our flag and claiming victory. We were going to high five. But then, during our slow advance, another buyer showed up. An offer was written. We were threatened. So we pushed forward and locked in a deal at what is still a great price. We will still high five, but I will not be quite so vigorous with my slap.
Other buyers screw up perfect negotiations. That's why it can be best to negotiate slowly and painfully only if the intended property is something that you can live without. If you must have a place, this doesn't mean that a negotiation cannot be won, it just means that quick and concise is the way to capture that goal. In Geneva National, we waited and we won, but in hindsight we can wipe our brow and breathe a sigh of relief. Had another buyer interrupted the drawn out negotiations I would likely not have been at the closing table yesterday.
This sale in Geneva National is valuable for the association, as it moves volume up and continues the slow mend of a wounded segment. A market cannot heal itself over night, but over years of increasing volume and stiffening prices, it will slowly and certainly improve. Geneva National is giving up deals this year, plenty of them, but the association looks better to me today than it did a year ago, and it looked better a year ago than it did the year before that. A big thanks to the buyer who let me represent his family in this transaction, and an even bigger thanks to all the buyers out there who didn't mess up our negotiations with an ill-timed offer.
GN aerial photo by Matt Mason Photography.