The Cape Cod Real Estate Standoff

Everybody who is looking for a house is using the Internet. There are so many places on the web to search for houses; it drives most real estate agents bonkers. There's no way they can keep up with every one, and to keep listings up to date on all these websites is unaffordable.

The Cape Cod real estate picture over the last few years has become a slow moving train. More and more houses keep getting added to the train, but the engine is no bigger or stronger. The market of a few years ago gave owners the idea that they were all sitting on pots of gold. Many of those owners don't understand that their house of 3 or 4 years ago isn't worth as much now as it was then. Not only has their house suffered more wear and tear, it's also become rapidly dated. Building techniques have made great strides in the last ten years and consumers (buyers) have come to expect more amenities and better value for their dollar. Most buyers also like newer houses.

There aren't many people who haven't sat through at least a few episodes of TV shows like "Sell My House" or some Better Homes & Gardens show telling them how to best remodel to make their house more appealing. Nowadays, everybody has at least some basic knowledge of what to look for when buying a house. And the bar is constantly being raised.

So the owners who feel they could make some significant money if they were to fix up their house (just a little) and put it on the market for soooo much more than they paid for it, decide to go ahead and list their house with a real estate agent. That agent knows the score on pricing and will be able to evaluate the seller's house and give him a fairly good evaluation of what the house should sell for. But there's also that little factor of competition working in the background. The real estate agent knows that another agent from another company may be called in and give the homeowner a little higher price to make sure he gets the listing, so Mr. Real Estate Agent adds on a few thousand to hopefully fend off the competition. And incidentally, the owner has had this house for a good number of years and there's only a very small, very manageable mortgage, so there's no really critical financial need to sell, just "an opportunity to make some money and perhaps upgrade to something closer to the water."

That's the typical scenario on the seller's side of the transaction. We end up with a house that is perhaps getting a little tired. Maybe the linoleum floor in the bathroom is worn and maybe even curling around the edges. And maybe those kitchen counter tops aren't the best color, never mind granite or Corean. And the owner knows that his neighbor down the street sold his house for $20,000 more than Mr. Real Estate Agent told him to put his house on the market for, and Mr. Homeowner thinks his house is much nicer than Mr. Neighbor's, so Mr. Homeowner adds $30,000 to what Mr. Real Estate Agent told him to ask for as a listing price.

Now we look at Mr. Buyer. He wants a second home for his family. They live in Connecticut and it's about a three and a half hour drive to this part of the Cape, so they can come up frequently enough to see what's available. Of course, the Internet has already let him search through houses all over the Cape and given him "Virtual Tours" of some of the houses he's been interested in. So armed with this information, Mr. Buyer picks out a part of Cape Cod that seems to offer him and his family what they might be looking for. They drive up and stay at a nice B&B or in one of the many motels on Rte 28, or even in a friend's second home who won't be using it for this weekend. Perhaps he's made contact with a real estate agent on the Cape and has set up an appointment to look at several houses. That's a very normal process and it takes us right through the time when Mr. & Mrs. Buyer have looked at several houses and have decided to make an offer on the one they feel will meet their needs.

Mr. & Mrs. Buyer have been doing a lot of reading and watching TV and they KNOW that houses are selling for much, much less than the asking prices. It's happening all over the country. They've heard the horror stories, which, to them, are good news. People are snapping up houses for 30%, 40% or maybe 50% of what the sellers are asking. So with this knowledge, they make an offer of 30% less than the asking price on the house they've picked out, fully expecting the owner to probably counter, but they'll end up buying it at a significant savings.

What happens now? The owner is given the offer and considers it an insult, and doesn't counter. His real estate agent explains that "this is what's happening in the market today" and urges Mr. Seller to counter, but Mr. Seller doesn't want to. After all, he's not in a hurry to sell. He can easily handle the small mortgage payment he still has. So Mr. Seller decides to wait for the next offer.

Mr. & Mrs. Buyer are surprised that they don't get a counter offer from Mr. Seller. But they don't need to worry. There are plenty of other houses on the market, they can come back some other weekend, and they can wait, because, after all, they're looking for a second home. They don't need it right away. It's a luxury that they can afford to wait for.

And so it goes. The train keeps moving along, picking up more and more houses to show, and people will still look at those houses. But the train goes slower and slower. There's no quick answer that can be supplied by banks, or the government. People on both sides of the equation can wait.

Eventually both buyers and sellers will reach a point where they just get tired of waiting. It will happen. It always has, and will happen again. It's another real estate cycle, and cycles run their courses. Just wait.