A decade’s difference: How the ordeal of buying a home in Nashville has changed – Nashville Business Journal
March 28, 2022
Our CEO, Christie Wilson, was recently interviewed by the Nashville Business Journal on how buying a home in Nashville has changed over the last decade. Find the full interview below and at this link for NBJ subscribers.
A decade’s difference: How the ordeal of buying a home in Nashville has changed
By Ian Bradley – Reporter, Nashville Business Journal
March 25, 2022
With rising prices, dwindling inventory and a seemingly endless supply of new arrivals, prospective homebuyers have reshaped the landscape of Music City’s housing market. Christie Wilson, president and CEO of Wilson Group Real Estate Services, sat down with the Business Journal to discuss how the market has changed in the last decade.
What are the biggest changes between 2011 and now?
In 2011, you would send them probably 15 homes in that first batch from which they could choose. That might be on a Tuesday, and then you went out on Saturday and looked at between five and eight homes. They may or may not like anything, so maybe you go out again on Sunday and look at five more homes. Then they may have chosen one that they like but they want to think about it for a couple of days. After they have the opportunity to think about it, you write an offer that may have been 5% or 10% less than asking.
That timeframe can take up to 14 days to do a home inspection. The seller may pay closing costs. Oh, and you also go back for a second showing. If the buyer didn’t like any of those homes you just knew that more would come on that week, so that’s a whole big difference.
Now it’s just a compressed amount of time that you have to do things and how you write the offer. Also when you’re writing an offer, you just have to be super strategic on how you do it.
You need to have either a preapproved buyer or you need to have your proof of funds letter with a lot of cash. You’ve got to have that money lined up. Your earnest money — the good faith money you submit when you make an offer, which the seller will retain if you default on the contract — that needs to be enough. Earnest money used to be around 1% of the sale price. Now it’s 2%. … As a seller, you don’t want that buyer to easily be able to walk away.
Any other big timeline differences?
You used to get the earnest money to someone in five days; now it’s like you want that earnest money in two to three days.
Closing was 30 to 60 days. Now we’ll have a 30-day close, but they seller wants possession for another 30 to 60 days. … Maybe they can’t get into their new place just yet, or they need the money from the sale so they can buy something or they’re building something and need a buffer in case construction takes longer.
It’s security, that’s a big difference. Buyers are giving sellers 30 to 60 days of possession and not asking that seller pay any type of lease back, so they’re staying in that house essentially for free.
How common was buying “sight unseen” a decade ago?
By 2010 or 2011 I may have had two people who had ever done that in my entire career and it frightened the heck out of me. We had a camcorder, and we would video the house and then take out the little tape and then mail them the tape because there wasn’t a way to get that on email. I remember doing that twice, and they bought the house sight unseen. They freaked me out. It just made me nervous that you were going to let somebody down … even though it was their decision; they were making the choice to do it. It’s still an uneasy feeling, but back then it was probably a $150,000 house whereas today it would probably be a $900,000 house.
Luckily it worked out just fine, but right now, I mean I probably did three sight-unseen sales last year as the buyer’s agent and goodness knows how many as a listing agent. Now it’s like, “Eh, whatever.”
Can you tell me about seeing prices increase like they have?
In 2010 or 2011 you wouldn’t bat an eye at $250,000 or $350,000, even for a nice house in West Meade. Now that same house would go for $1 million or so. I think we quit batting our eyes around the same time, with Covid. I’ve just never seen anything like this with the appreciation numbers and with so many homes going for over $1 million.
Now if someone has a maximum of $500,000 to spend we’re looking at the $350,000 to $375,000 range so they can afford to bid up, and that’s just sad. It’s nobody’s fault. It’s inventory; it’s how the world turned in 2011 when they weren’t building anything and now we’re just catching up.
So, is there something about the market that you miss or you wish would come back?
In Nashville in 2011 most of the real estate agents knew each other and it was a very collaborative space. Now we have so many people who are coming from other markets that are a little bit more cutthroat. Perhaps less professional or maybe the agents are less trained, so it doesn’t feel as collaborative and uplifting that you’re working together for your client.
Don’t get me wrong, in the past we all represented our clients very well, but we tried to work together. I don’t know if it’s just the nature of people in general right now — people are just agitated and not as kind or collaborative. It’s like, “We have got to work together to get our clients to their goal, which is the closing table. Be nice.” There’s less professional courtesy.
Do you see a lot of people rushing to buy a house and then experiencing buyer’s remorse?
There was a Zillow report that said 75% of homebuyers in 2021 were dissatisfied with their home purchases. It was mind blowing. Either they decided they didn’t like the location, the house really didn’t fit their needs, it was too small or there wasn’t enough storage. Maybe they wanted more of a yard, whatever.
But everyone is making decisions so quickly, and they’re dealing with buyer’s remorse afterwards. It was a fascinating article.