The Market Pulse: Buyer’s RemorseMarch 17, 2012
Most buyers are still nervous about jumping back into the Boston luxury real estate market after the recent economic downturn. Although metro Boston was not really affected by a depressed economy, many buyers have a different notion, especially those coming from the suburbs. Buyers who have been around looking at homes in Boston and expecting “deals” are realizing that rock bottom prices are not realistic in the city, especially high-end listings.
In some cases, buyers have “buyer’s remorse” right after their offer is accepted and they may realize that they have stretched their budget beyond their means. It hasn’t been uncommon, in a down economy, for buyers to look at properties 30% higher than they can afford, hoping that the seller will negotiate.
Well, the sellers have not been negotiating on prime homes in Boston. Listings in the best neighborhoods like Back Bay/Beacon Hill/South End/Midtown and the Waterfront have held on to their prices. Now that the economy is picking up, buyers are stepping up to the plate with offers that exceed their means. Once their offer is accepted, they realize that it is too much of a stretch for them and back out of the contract. It is an unfortunate chain of events that is stressful and unfair to both the buyers and the sellers.
Buyers should keep in mind that a signed offer is a legal document and should be taken seriously. There are always contingencies and “outs” to terminate the Boston luxury real estate contract if they opt to, but for most part, it’s usually just buyer’s remorse and cold feet. After a contract falls through, the buyer’s question is always “do I get my deposit back?” Depending on the nature of the contingencies, the deposit should be returned.
Please do your homework before making an offer on Boston luxury real estate. Don’t get pressured in making an offer beyond your means. Any contingency issues having to do with the property can generally be resolved. However, if it involves the buyer’s personal finances, it is a whole different story. At that point, the buyer should step back and brainstorm with an experienced broker about what homes in Boston are right for them.
More questions? Contact me to learn more about the buying/selling process.