Are Buyers Spoiled?

By
Real Estate Broker/Owner with Kirby Fine Homes

For the last few months, I have been working on and off again with several buyers, which is keeping me really busy. However it is proving difficult to find a home that each of them likes. Now, trust me, we are finding homes that are fantastic, but it seems buyers want the cake and to eat it too in the current real estate market. My question has to be, are buyers spoiled when it comes to amenities inside homes?

Over the last five years, with the increase in home "appreciation" equity, many home owners could afford to renovate their aging homes. Trying to make the home more modern, it was common to put granite counter tops in, hardwood floors, stainless steel appliances, and exotic wood cabinets. Builders jumped into the fray as well and offered all types of previous "upgraded" amenities as standard options.

Rehabbers that bought homes to fix and flip were making a killing on net profit, so to make their homes more appealing, they were putting in the best products. I remember watching one of the cable home improvement shows where a 900 square foot home was being rehabbed, which they priced moderately, but it had granite countertops and high end appliances. As a former rehabber myself, a few things you have to look at when considering what to out fit the home with are:

  • value of the home
  • type of buyer
  • location of home

If the home is not in a great area, or has a low value, then one should not over build the home with luxury amenities that are not supported by the surrounding homes. Unfortunately, I saw this happening time and time again over the last several years, and it looks like buyers are now used to top of the line, even in the smallest homes.

One new home buyer I represent has been looking at homes near Lake Nokomis in Minneapolis. They can only afford a certain amount of home, which means they cannot buy a home even a few blocks from the lake. Most of the homes we are looking at were built 30+ years ago, some need minor updating, while others may need a ton of work. Obviously, the less work to put into the home the better for my buyers.

What has surprised me most is that we have found a few homes that are PERFECT for them, being completely renovated. The only thing they don't have is granite countertops, high end appliances, etc. The buyers refuse to accept any house that doesn't have these amenities, I have come to learn. I have tried to explain to them that in their price range, these "luxury" items are hardly found, but they sadly refuse to believe it.

So my question is, have buyers, especially first time home buyers, been spoiled by the boom years? Growing up in a lower income family, one thing I learned was that sometimes you have to work your way up to what you really want. We bought a modest first home five years ago, and it took three years to finally get the money to tile the floors. After hard work, we were able to build a new, larger home, this last year.

But it seems to me that the new generation of buyers no longer want to work for things. They want it all, right now. With the market haven fallen the last two years, many buyers now expect to get everything for nothing. Sadly, I have to try and bring current buyers into reality, but it is no easy task. Buyers are even shunning homes that need a little updating via carpet or new vinyl because they don't want to do the work later. Sometimes, you just have to look past these minor flaws if your goal is to get into a home.

So what's an agent to do, when buyers just won't come to reason? Well, I guess just keep showing homes until it finally sinks in because, after all, this is just one more learning experience for the first time home buyer in Minneapolis.

Comments (93)

Anonymous
Joel Milian Mount Zion Realty Miami-FL

Hi Jennifer

Most recently as a buyers-agent I am finding that the sense of urgency is not there for propsective buyers however we as agents need to start creating the urgency and doing due diligence to narrow down the wants and needs of these buyers until they are pinned down to make an offer. Like thesaying says you can lead a horse to the water but you cannot make them drink. Then at that moment we need to make the choice to either cut them loose or continue to invest time and energy. Another thing is when comparing prices now for the first time since before the boom there is the low avg. medium avg. and high avg. and that needs to be story line for us to really find out what the motivation of the buyers are in the purchase price.

 

Jun 06, 2008 08:37 AM
#74
Michelle Hall
Century 21 Hecht - Denver, NC

Hi Jennifer,

This is a great post!  I do feel that buyers are becoming more spoiled.  America has the concept of "now" which is why so many are in credit card debt and going into foreclosure.  Buyers are use to seeing luxury even in homes that shouldn't have it, so they expect it always.

 

Jun 06, 2008 10:01 AM
Anonymous
Anthony Fountain

Jennifer,

It appears there is no difference between buyers attitudes in either Australia or the USA. All want the most for the buck and whilst the canny buyers have been sitting back waiting for the fall (it is nowhere ads severe here as it is in the USA), part of the seller problem lies in the fact that many younger people (maybe it is the Generation Y thing) "overshot the runway" with 100 or 105% loans of up to $500,000 to be able to get everything in their first purchase.

A number of previous posts noted their inability, or unwillingness, to "work their way up" from  a more modest start and that is typical.

However, as a marketer and not a valuer, we ignore buyer feedback as to property value at our peril for we are simply in the business of selling property and, like livestock although not to the same degree,those values will vary.

 

Jun 06, 2008 10:35 AM
#76
DALIA KIBBY
One Sothebys International Realty - Cooper City, FL
Selling Broward County Homes with Passion!

I've thought that buyers are spoiled for some time now.  They want it all and cheaply!  Very frustrating.  I'm working with some buyers and they have eliminated entire subdivisions yet still want to buy cheaply, have a pool, fairly remodeled, split bedroom, etc.  I'm down to about 3 subdivisions in all of south florida.  Waste of time!

Jun 06, 2008 11:48 AM
Anonymous
Cathy Elmore - John L Scott - Ocean Shores

I don't think they are spoiled, I think they are uneducated but think they know it all because of the national news and the internet.

Luckily I work with so many past clients who I can have a real honest conversation with and they don't say...."Well I got on the internet........."  It is totally different regionally we still have great homes for great prices but there are always those buyers who are looking for distessed buyers or because the "market is soft" sellers are willing to give homes away.

Uneducated, unrealistic and they will not buy now and then have a rant because prices went up before they did buy.  Oh well!!

Jun 06, 2008 02:21 PM
#78
Lisa Friedman
Alliance Realtors - Bedminster, NJ
Central New Jersey Real Estate

Oh My God, are they ever spoiled now!  I can barely bite my tongue with some of these unrealistic people.  I just had buyers insist on a 35k credit for a house that needs +/- 13k of repairs.  And I have another buyer who will only look at entry level condos with stainless appliances, granite countertops and hardwood floors in a very entry level price range and then will only make low offers to boot.  There is no end to the ridiculousness.

Jun 06, 2008 04:10 PM
Lisa Southern
Lisa Southern Real Estate - Raleigh, NC
Lisa Southern Real Estate

Thanks for the great observation.I find buyers are not spoiled as much as not educated by us. I know it's not the popualar opinion, but buyers need to hear the plain truth especially when they get upset they can't steal something. I try not to fall into the "buyers market" trap. I try to explain upgrades are just that and need to be considered fairly when making that initial offer. Lowballing the initial offer never works and often is detrimental to a good outcome.

Jun 06, 2008 06:37 PM
Anonymous
Colleen Grasso

Jennifer, I have been in the Real Estate industry for 4 years now and I have found that in the past 1-2 years the buyers are much more demanding of certain amenities in a home. Although the lower price range does not have granite, many times niether does a moderately priced 350k home have granite. Buyers are pickier than ever.

We are working harder than ever trying to educate the consumer about the market, home features, interest rates, etc. We can only stay positive and keep pushing forward. Eventually the "perfect" home will be found for each buyer.

Jun 07, 2008 03:24 AM
#81
Anonymous
Sarah Metzger, Crye-Leike, Realtors, Cabot, AR

I think you're mistaking "spoiled" for a lack of discipline.  First-time buyers can't be "spoiled" as to features and amenities if they've never owned a home before...they have nothing to truly compare it to (no matter what their parents had or what they see on TV).  I think they have unrealistic expectations based on inadequate education, in addition to a massive dose of no discipline.  (This is my generation, by the way.)

Still, an interesting point to note about younger buyers who want "everything" in their first home...please consider the cost of materials and labor these days.  Suppose these younger folks have worked hard and saved for their down payment.  No matter how much "sweat equity" you put into it, you will have to shell out money for materials.  AND, if you don't do the improvements properly (which is entirely possible for someone who's never owned a home before!), you will have to pay someone to do it right on top of what you've already put into it.  I will close later this month with a first-time buyer couple who KNOW they want to stay in the house for 10 years, and they want to make sure they're choosing the right house for that investment...not only to enjoy it while living in it, but to make sure it doesn't drain what they've saved in addition to their down payment.  As a result, they were picky about the homes in their price range.  I was fortunate...they stayed in their price range, but I understood their desire to "get it right". 

Given how much trade professionals charge per labor hour (had a plumber out to your house lately?) and how much materials now cost, young people who haven't yet had a lifetime to build wealth and equity (i.e. cash lying around for repairs) are leery of "fixing up" a home when they're not reasonably sure of what they're doing, or how much money it will cost them. 

Perhaps we should give them more credit for trying to make sound choices with their limited resources...if they're serious buyers, this type of support and counseling might be all they need to get off the fence and submit a reasonable offer!

Thank you for the post...it was very thought-stimulating!

Jun 07, 2008 09:58 AM
#82
Anonymous
Michael Hamberger

Hi.  Buyers are spoiled.  Why shouldn't the be hat - Home & Garden Network reminds them constantly that only Stainless Steel appliances and Granite Counter Tops will do,  builders put them all in new houses becasuse they can get high mark-ups for them and new buyers have (those that have only started to loook in the last 2 years) have heard nothing but doom "buyers market" for their entire search period.

 

Like everything cyclical, it will change.

 

Good Luck,

 

Michael

Jun 07, 2008 12:16 PM
#83
Anonymous
Debbie Solano

This discussion is good.  It has helped me to reflect.

My buyers are spoiled because I indulge them.  I let them get away with it.  If I were better at setting boundaries with my buyers, then I would not show them everything. 

I think that I show buyers everything there is to see because that is the way I do everything in my life.  I call it the shot gun method.  Fire away from left to right and then you will catch something.  I am so afraid of missing something that I go for everything.  I need to learn to take very careful aim at a target. 

Jun 08, 2008 01:30 AM
#84
Anonymous
Julie Venturi

Debbie,

I was so glad to read your post!  I do the same thing and then I am exhausted from all the running around.  I have had to work on it a lot lately.  Take it day by day!

Julie

Jun 08, 2008 05:48 AM
#85
Thomas Bradley
Century21 Select Group - Lake Harmony, PA

I think that Buyer exocet the treqtmrnt described and therefors sre they spoiled?  Yes of course they are. the market conditions create it and TV Home shows preach it to reinforce it.  No matter what the cause, its a fact so we all (agents and sellers need to deal with it as it is not not likely to change any time soon.  Provide the service or die.

Jun 08, 2008 01:49 PM
Lyn Sims
Schaumburg, IL
Real Estate Agent Retired

Jennifer:

I have noticed this more & more in my area - the buyers want 'the deal' and also want to do NO WORK AT ALL. That includes those appliances!  Everything must be perfect or they just continue on.  There have also been alot of short sales being done where people have overimproved their homes with the granite, etc. & you can see they just went nuts not paying attention to the area or their price range.  First time home with granite? Give me a break.

You can continue to work with them until they 'get it' or they just might kill you with frustration. No easy answer when a buyer is hard to come by.

Jun 09, 2008 03:40 AM
Anonymous
Kristina

Jennifer,

You hit the nail on the head! I have been having this discussion with many fellow agents. Our market here in West Seattle has held pretty steady through these interesting times. We DO have an amazing amount of inventory causing the old "closet full of clothes and nothing to wear" issue. These buyers want something NEW! Here, we have been overwhelmed by a townhouse boom and it so difficult for a buyer to see all of the brand new features that come with townhomes in their price range and understand why that is not going to be found in a freestanding home.  Luckily homes are still selling pretty fast so it doesn't take but one time for buyers to wait too long and miss out on a home they loved. They start to move a little faster and realize a good fit when it comes along. Tough way to catch on!?!

Jun 11, 2008 10:04 AM
#88
Anonymous
Elizabeth

I stage and market listings for several Realtors in North Carolina, and I have to agree with the "spoiled buyers" argument.  In fact, when my clients realize that one of their listings isn't going to sell without some staging work, the "spoiled buyer" argument is actually what I use when speaking to the sellers.  I explain that no matter how much they love their home the way it is, because... of course, it IS their HOME.  Unfortunately, buyers here are so accustomed to seeing so many staged model homes and watching HGTV, they can't fathom how or why a pre-owned home doesn't show exactly like a model.

It's definitely a trend, and I don't see it going away anytime soon.

Jun 13, 2008 02:44 PM
#89
Anonymous
Andrea Mills

I have recently shown a fixer upper to first time home buyers. Their price range was in the low 80's but they expected a turn-key type home with new appliances and all the works. The home I showed them had a pool, a huge family room with french doors leading out to the pool area. Yep, the pool was green and the pool cage needed some TLC. However, nothing that some pool shock and elbow grease wouldn't fix. Nothing in this home was good enough for them. It turned out that the buyers couldn't qualify for a loan or even any of the government programs for down payment assistance.

Jun 14, 2008 10:42 AM
#90
Anonymous
Angela

My husband is a Broker/Owner in Northern Michigan, where the market is tough enough as it is!  YES, BUYERS ARE SPOILED!  They also feel entitled, due to the current market condition with desperate sellers, foreclosures, etc.  Our home is on the market.  It is a log home, completely updated (no granite or SS appliances), needs NO work.  It is on a lake, nicely landscaped, brand new garage, quiet private country setting.  We are throwing in a canoe and rowboat, home warranty, and possibly more land if we get close to asking price.  We NEED to sell because I am having baby #5 in 10 weeks and we have outgrown our home...it is 1,800 sq. ft.  Our home is worth $215,000.  We offered to let it go to a relative for $170,000 in order to help them out financially.  They passed on it!  She is spoiled and picky and thinks she is going to get a 2,500 sq.ft dream home for $165,000.  It is maddening, and we are running out of time.

Jun 16, 2008 07:05 AM
#91
Anonymous
Angela

I forgot to mention also, that buyers also want your big screen TV, leather furniture, bedroom furniture, new BBQ grill, patio furniture, your expensive dishes...HELP!!!

Jun 19, 2008 04:08 AM
#92
Antoinette Murphy
RE/MAX Atlantic - Absecon, NJ
GRI

Jennifer, yes, the buyers are looking to put in very low bids, even after the property was reduced $40-$50K already.  When they loose out on 3 or 4 houses because of low bidding, they will realize the market value of these properties.  They also have to start looking in the price range they can afford. 

Jun 23, 2008 03:19 AM