It looked like a Las Vegas wedding chapel at dawn. At the foot of a grassy knoll in Arlington, we smoothed our clothes and squinted into the sun. Some of us smiled sheepishly at one another; others clutched paperwork. Then a door swung open and our herd gazed upward. “Come on in!” called a cheery realtor. “Have a look around.” The home smelled so pungent that I — along with some other hopefuls, who looked as though they’d blundered onto the set of CSI — fled before hitting the foyer.
As my family and I shop for a home, we’ve run the gamut of domiciles. Some are in respectable condition and staggeringly priced. Many are ramshackle and outrageously priced. Consider this: According to the Boston Business Journal, when the lowest priced single-family in Brookline went on sale on September 3 (a bargain at $525,000), more than six dozen people descended on its first open house. The garage was in “disrepair,” there was asbestos in the basement, and the house needed a gut renovation. Still, five of six offers that came in immediately were above asking. In October, the place ended up going for $60,000 more than its listing price.
This is intimidating, but it’s now the norm around Boston. According to The Warren Group, the most recent September marked the best September for Massachusetts single-family home sales since 2005 , and sales have increased 16 percent since last year (for more on the local real estate market, see Examiner). An analysis by Weichert Realtors, Channing Real Estate found that in one Cambridge neighborhood, 22 of 25 homes purchased over the last six months sold above list price.
These days, buyers are so anxious about missing out that they’re willing to perform a frenzied mating dance with sellers — writing love letters, making cash offers before the open house is over, even waiving home inspections. It’s a sellers’ market in desirable Boston suburbs, and owners can take advantage.
But what if buyers were allowed a deep breath? We could mandate a weeklong waiting period between the first open house and when offers could be submitted. It would allow them to lock up solid financing, reach out to lawyers, confer with their agent at length, run final numbers, and actually think through whether they want to take a massive leap (and invest in a costly cleaning service).
After all, impulse buys were one of the things that got us into the mortgage crisis. Now, as more headlines warn of rising interest rates and escalating prices, buyers need to think objectively, unruffled by the competition. The house “in need of a little TLC!” might seem like a bargain given the news, but not too long from now it’s going to be midwinter, and you’re going to wonder why you beat out 40 people for a disintegrating furnace.
Would you get married overnight? Not typically. You go on dates. You make sure you feel comfortable. You spend time before making an investment. You do not view each other surrounded by several other people during a half-hour chaperoned date and then immediately submit your proposal along with a check and an escalation clause in case someone comes back with a better diamond. (Not in my experience, anyway.)
So what’s in it for sellers? Not nearly as much as for buyers, it’s true, but they perhaps wouldn’t have to entertain shaky offers or buyers who might pull out at the last moment. According to Timothy Warren, CEO of The Warren Group, the top reason home deals fall through is mortgage issues. Another big deal breaker is an inspection that opens the door to further price negotiation — or gives those with buyer’s remorse an easy out. A waiting period might weed out tentative offers and people who caved to temptation but are inclined to walk away during an inspection, leaving a seller back at the drawing board — a disheartening experience all around, especially if that seller is also a soon-to-be buyer.
Extra time could also help buyers consider other towns — something easier to do alone with your bank statements and less tempting fresh off an open house filled with dozens of other people who smell of eagerness and cash. In coveted areas where inventory remains low, not everyone will get what he or she wants. It’s humbling, but as demand outstrips supply, it’s the truth.
Which is why it’s so important to put time between money and feelings. A grace period could help sellers benefit from serious offers while taking pressure off jittery buyers. Interest rates might rise and asbestos might fester, but in the home buying race, our sense of dignity needn’t plunge.
BY THE NUMBERS
Average number of days on market for a single family in September 2013, according to the Greater Boston Association of Realtors
Average in September 2011