Today we bring you an anonymous weekly column about real estate by one of the most experienced agents in Brooklyn:
Unusually, I have spent the last two weeks working with a number of buyers in failed attempts to become owners of Brooklyn real estate. Boy, is it brutal out there.
Since when does one have to have all cash to be a successful bidder? Sellers have raised their expectations so fast and by so much that we all know bank appraisers will not be able to keep up. So now unless a buyer has at least 50 percent cash, their bid is not going to be accepted, no matter how high they go. For normal working people, that much cash is hard to come by.
It used to be that a good solid mortgage preapproval was enough. No more. During the 2008 financial meltdown, banks stopped issuing real preapprovals, and the watered-down versions you see now are not worth the paper they are written on. I actually saw one last week from a bank which said, in reference to a buyer who has been doing personal and business banking with them for over 10 years, that this buyer “appears to be qualified” for a mortgage. No seller is going to value that.
Buyers now have to make snap decisions, too. We hear over and over again, one day after a listing appears, that “offers are in” or “we’re going to best and final.” It takes at least two visits to really understand a place: One to determine that it will work for you and another to see all the pluses and minuses. Listing agents act like this is an outrageous request.
Some buyers have the stomach for this and do not take it personally, accepting market conditions for what they are. Others feel assaulted by the process. Who can blame them? It is no fun. Sadly, as they move on to consider the suburbs or other options, I feel that the neighborhoods of brownstone Brooklyn are losing out on the vibrant blend of residents that makes our neighborhoods.
Economics are at the heart of this market. Demand simply outstrips supply, and prices rise. I wish every buyer fortitude and luck — two things you’ll need in this market in addition to buckets of cash.