One of the most stressful aspects of real estate is the time sensitive nature of it.
Whether it is searching for a home to buy, preparing for a home to go on the market, negotiating a deal or getting all your ducks in a row prior to the closing, time is often of the essence when it comes to real estate.
As real estate agents, we learn how to deal with time pressure, how to help our clients feel comfortable with the parts of it that are unavoidable, but also how to work smart so we don’t end up in situations where we’ve got very little time to make very important decisions.
We thought we’d share the three big picture reasons as to why time is often of the essence in real estate. Don’t worry, we’ll keep it short as we know you’re a busy person.
Reason #1 – There is just that one property.
Whether you are buying or selling, it always comes down to just one property. As much as we are fond of talking about average prices and what is going on in the market, you don’t buy a house that is the average of houses and you don’t sell the market, you sell your property.
While real estate is very much a tangible item (the “real” bit gives it away), it is not a commodity in the sense that there are exact substitutes. Are there other properties out there? Sure. Is there another property that is the exact same property, available at the exact same time, that you can buy at the exact same price? No.
In this way, real estate differs considerably from lots of other purchases of physical items. After all, you’d never get worked up and require immediate answers if you were considering the purchase of a TV, because you know that you can find that exact TV from the exact manufacturer, and likely at the exact same price. Anything that is scarce has a strong element of urgency and the more unique a property is, the more there is pressure to deal with it immediately or risk missing out on that opportunity.
Reason #2 – Things change quickly.
The second aspect of real estate that makes it time sensitive is that the situation can change very quickly. While we most often think about that in terms of an overall market shift, where we go from a seller’s market to a buyer’s market, there are more local changes that happen very quickly.
A neighbourhood that is super popular can go from no listings to a bunch of listings in a very short time frame. When neighbours see a house sell in their area for a price that pleasantly surprises them, they often decide now is the time to sell as well. Enough people make that decision and the pool of buyers is suddenly split between a number of options, meaning less competition and not as high a sale price.
Outside interference in the form of mortgage rate or rule changes or government policy changes can also quickly change the situation. Whether you are a buyer or a seller, it is uncertain if the situation that currently exists will continue as it is for much longer. This means urgency is called for as there is nothing worse than being ready to take action, only to suddenly have the ability to take action stripped away.
Even if the option to buy or sell still exists, time is often of the essence because a change can dramatically increase or decrease the sale price of a home. This can be a nearby comparable that sells for a very low price for some reason (causing the next home to sell for less as a result), an economic change such as a major employer announcing a major expansion that requires lots of new hires (causing homes to sell for more as new buyers arrive) or literally thousands of other variables that change the relative value of a property.
Reason # 3 – Home is where the heart is!
Finally, the majority of residential real estate transactions involve people’s principal residences. While you can argue that selling the car your son learned to drive in has a fair bit of emotion attached to it, nothing compares to your family home.
Whether you are buying or selling, people get very emotionally invested in real estate transactions for themselves and their family. It isn’t just a large purchase, it is the place you and your partner are planning on raising your kids. It isn’t just a big change when you sell your house, it’s saying goodbye to the basement you started your business in and where you went from a renter to a homeowner.
The emotional aspect of real estate means that people care deeply about what is happening and they want to aware of what is happening. The financial aspect of buying or selling is very significant but we truly believe it pales in comparison to the emotional side. The act of buying or selling real estate is often crucially important to your plans, your hopes and your dreams. As such, waiting to hear news on what is happening is agonizing, and time is absolutely of the essence.
If you are looking to buy or sell, make sure you work with an agent who understands the importance of acting (and responding) quickly. When you have full-time, focused professionals who have made helping people buy and sell real estate their career, you get the attention and results you deserve. If that sounds appealing, get in touch with us. We promise we’ll respond right away!