WARNING, WARNING…AGAIN! New stats and information that is CRUCIAL if you are trying to buy your first home in 2022. It ain’t no picnic, so you need every tip, tool, technique, trick, and hack to make this happen for you. This episode explores how to win bidding wars, and how to choose a true professional for you. It all starts with the EARLY work, with a professional team helping you prepare months before you ever go look at homes, and then having them on your side when you enter the crazy auction style, bidding buying of 2022.
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EMERGENCY Information AGAIN On 2022 Bidding Wars – And Your Realtor Representation
Why First Time Home Buyers Need A Professional To Have A Fighting Chance In 2022
No buyer wants to hear it but if you’re trying to buy a home in 2022 bidding wars are here. It’s supply and demand. It’s real simple. Every year since 2005, we see about six million homes sold on average. At the beginning of 2022, we dipped below less than only 950,000 total homes for sale. We used to sell six million and now we’re less than one million out there. With mortgage rates still low but rising a little bit, the race is on. How do you win?
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I’m back and I’m better than I was because I’m ready to help you win in this battle. I hate using war analogies all the time but this is war in 2022. It is not easy. This is an emergency news-breaking alert. I already gave you guys the big warning this year about all the bidding wars that were going on, the low inventory and the long lines. If you read the back catalogs of the show, you learned a lot of specific detail about bidding wars in general in episode 39, 41Â and 46.
Now, I have some more pressing information that is going to help you and give you better odds to make it happen for you. Don’t give up. It won’t be easy. Go back and read the 2021 and 2022 episodes that came out. There’s a lot of stuff in there to help you understand your numbers and believe Ted Lasso’s style, that this is a battle worth fighting for.
The way it’s going is in 2022, you’re chasing the market as we like to say. Who’s we? Real estate nerds. Prices are going up so you’re chasing that. Interest rates are low but they’re rising a little bit so you’re chasing that. Rent, that’s going up too, you’ve always been chasing that. This isn’t war. It’s freaking NASCAR and the white flag went up and you’re in the middle of the pack. You are chasing.
It’s like crazy Talladega Nights or Herbie, The Lovebug, sad life. There are hi-jinks happening everywhere and the race is on. There are lines at open houses all over the country with buyers writing offers right there on the front porch in the first hour that the home is on the market. You’re going to need all the help you can to win these bidding wars.
Why is this happening and why subject yourself to this? First of all, you subject yourself to it because you’ve listened to the past show and you believe in the numbers. As far as it happening and what you can do about it? First, let’s have a Zen moment. This is happening. Breathe in, breathe out. Accept it. This is where you are and when the universe put you in this position to think about buying a home and there’s very little you can do about it.
[bctt tweet=”This 2022, there are less homes for sale than ever.” username=””]
Unless you’ve got one million homes that you want to put on the market tomorrow. If you do, why the hell are you reading this? Back to Zen. Breathe in the numbers, data, facts, knowledge and joy of being informed. Breathe out all the negative thoughts, regret and your uncle telling you this is the stupidest time ever to buy a home.
Fact one, with what’s happening in 2022, this is insanity. That’s the emergency urgent show. I don’t know how you want to quantify what insanity is but if there was a formula, this blew the formula up because this is bananas out there. There are fewer homes for sale than ever and that means you will be in a bidding war. If you’re not, you’re in a weird area or that home is way overpriced. This is crucial for you to understand for several reasons.
Low Inventory
Number one is low inventory. It means you will have competition. People still need to buy homes. You’re going to see bidding wars and it’s critical that you do all your preparation before you get out there and see any homes or even think about writing an offer. That way your offer is going to be the prettiest, shiniest and the most likely to get chosen. Sometimes it has to be all that to even get looked at.
Professional Representation
Number two, it’s critical and crucial that you hire for free, a great professional advocate to represent you, your offer, financing and ability to be a buyer who will close on this home. Your realtor’s presentation of your ability to close is as important as the numbers on the piece of paper. It’s a beauty pageant. There’s a big difference between a girl walking on stage off the street by herself with no training and a girl who hired one of those professional pageant coaches.
Broken Record
Number three, I feel like a broken record on this one. For you Gen Z and Millennials, a broken record reference refers to when your hipster friends, the vinyl record has a scratch on it and it plays the same section over and over again. I’ve said it before and I’m saying it again if 50 people are writing an offer on a home, the price is going to bid up higher than the list price and then 49 people will not get the home. The neighbors are going to see how much Barry’s dump a home sold for with the big line of people outside and they’re going to put theirs on the market with a price bump, ergo prices are going to go up because the inventory is way down.
Here’s what’s happening in December 2021. The numbers dropped 11.1%. In that little time period in a month, dropped to only 923,000 units for sale nationally. That number went down 11.1% but it was down 19.5% from December 2020. That number of 923,000 units in December of 2021 coming into 2022, it’s a ginormous 40.5% down from the pre-pandemic inventory numbers in the options out there for you to try and buy. It is simple supply and demand.
You need professional help. For many of you, maybe that’s not the first time you’ve heard someone say that you need professional help. Don’t worry about it. I am not all up in your business. In this case, I’m referring to the professional help of an experienced realtor advocate now more than ever. You have to be careful in your choice of representative. I’ve said this ad nauseam if you’ve read my catalog of episodes. You, the buyer, are in control of who you select to be your advocate.
You simply must have a great professional, knowledgeable and experienced pro, if you even want a shot at securing a home in 2022. The competition is Savage and not in a good way. Savage like someone ripped your arms off and left you for dead. Why am I repeating this information to you again? It’s because of the inventory numbers. This is the 2022 emergency market update. You need to be even more careful than ever in choosing your buyer realtor representative because they’re going to know the tricks to get your offer even looked at.
The inventory thing is scary to me but I’m all uptight and got my butt cheeks all clenched up because I have some frightening news that I heard now. There’s a strange thing happening in this post-pandemic world. There’s The Great Resignation era going on and it’s happening in early 2022. The number of new untrained realtors is way up in this market where it’s a difficult time to help people.
We’ve seen the largest growth of numbers of licensed realtors ever. There are three million licensed agents in the United States. I don’t even have the candidate numbers and there are only less than a million homes for sale. Let that one sink in for you. Think about that one for a minute. We have the lowest number of homes for sale. The number of homes, the product that must be sold for anyone in this industry to make any money, it’s at an all-time low.
[bctt tweet=”New agents are not what you need in today’s insanity and market.” username=””]
More people, post-pandemic, with The Great Resignation is deciding to jump into this crazy job market. They’re jumping into a super competitive job where you have to fight for every single client because the inventory is so low yet the number of licensees is exploding. Why? It is a little bit from The Great Resignation that happened during the pandemic but the real reason is greed.
In 2021, the market took off and people who were maybe rethinking their careers, suddenly the whole being a realtor thing looked fun and lucrative. Prices went up 19%. Homes were selling so easy that you could put a monkey with balloons in the front yard, you’d get 25 offers. People saw this and they decided, “That career sounds like it’s going to be easy money for me.
Here are the crazy numbers in 2020 in California, there were 299,000 realtors, there’s more than that now but in 2020 there were only 439,200 homes listed for sale. Back then in 2020, there were 300,000 realtors and 439,000 homes for sale. That’s only 1.46 homes to sell per realtor. The numbers have only gotten worse since then because as I explained, the number of realtors has gone way up and the number of homes for sale has gone way down. That’s California and it’s expensive here. The average realtor can sell 4 to 5 homes a year and make more money than a cop, nurse or teacher.
In this crazy market, I wrote seven offers for buyers and a lot of the pros are working with multiple buyers doing the same thing. These people trying to do 4 or 5 deals a year so that they can make a decent annual salary. The greed gets the best of them. They see the shiny finish line and they think, “I could set my own hours. I only have to do a few deals a year to make decent money.” They think that they can only do a little bit of work and still make a lot of money but if you’re only doing a little bit of work, only doing a few deals a year, how are you going to know the ins and outs of what’s going on in the market.
The numbers are crazy. We see about one million realtors nationwide and another million or so with a real estate license. That’s the way it works. There are one million people out there who are realtors who pay attention to their job and pay dues to be in the union and keep up with everything but there are one million other agents who just got a license. All they had to do was pass a test that my fifteen-year-old and my eleven-year-old daughter could pass it. She’s smart for an eleven-year-old but a smart eleven-year-old shouldn’t be able to pass a licensing test for an adult job that represents buyers on a hundred of thousands of dollars investment.
Here’s the crazy emergency information that I wanted to get to all of you, that number, one million licenses and realtors, it’s been crazy rising. In 2021, there were hundreds of thousands of new agents that jumped in 2021 when they saw how easy it was to sell a home. We now have almost 1.5 million realtors and non-realtor licensed agents. About three million people looking to help you buy and it was only about one million homes for sale. Does this make any sense?
My answer is greed and the promise of easy money and instant gratification. Those are some powerful aphrodisiacs. This episode is a warning. Be careful. These new agents, rookies, newbies and woefully undertrained and tested licensed individuals are trying to help buyers in the most competitive and difficult market in history. No offense to them but spit in truth.
That’s like the US Military walking down the street, picking up 500,000 new recruits and then suddenly someone’s seen a dictator on the other side of the world, reveals that he has this monster secret army with a bazillion troops and tons of weapons and he starts World War III. All the other countries, they’re going to band together to fight him and they send their best train troops to fight because this is serious and we got to win but the United States decides that they’re going to go out and grab those 500,000 randos they grabbed off the street, the untrained people and put them right in the front lines.
Instead of sending the veterans, who’ve trained for this for years. They’re going to send the newbies to try to win a war against the toughest foe. They’re going to go into that expecting not to get slaughtered. In this analogy, when they do get slaughtered, all that means is they don’t get paid. They don’t die. We’re going to lose the war but these people don’t even die. They don’t get paid.
Meanwhile, you lost your dream home and possibly tens of thousands of dollars and this sucks for a million reasons but I’m here to help you see that now, you do have a leg up. You’re here, you got me telling you the secrets, giving you the straight insider tips and the how-to. You want to interview an agent yourself to make sure you’re getting yourself the right person, episode six, take it and run. If you want to, you can reach out to me at HowToBuyAHome.com or DavidSidoni.com and ask for your very own unicorn in your town and know that you’re going to be getting an experienced pro.
[bctt tweet=”Many unknowing buyers are using people that frankly don’t know how to get things done.” username=””]
I’ve talked about how the ibuyer companies are courting you. They are reaching out like crazy. The tech companies want to sell you on buying a home with them with a few clicks. Tech sites like Opendoor OfferPad, Redfin, Zillow, Perch, Knock, OfferDepot, Zavvie and there’ll be more. They have slick sites and easy tech but here’s the catch. They are marketing and courting the sellers by telling the sellers that they’ve got all you buyers coming into them who are going to click on their site. They use that as a marketing tool to capture the sellers and get paid from them. That’s the money they’re trying to secure.
They tell the sellers, “You don’t have to do anything that you have to do with a regular realtor. You don’t have to do open houses. You don’t have to do any of that stuff, just list your home with us and our tech is going to get you to the buyers.” They’re going to click on a home and most of the time, these ibuyers that do click on the home that is going to come to them, nice and easy, these tech companies are going to say, “Why don’t you get represented by us? We’ll take care of it for you.” Remember, they represent the seller first.
Sometimes they’re even going to say, “You can be represented by us. I’ve got one of my buyer pros.” What does that mean? That means that one of these guys Opendoor, Redfin, Zillow, Zavvie or OfferDepot, they’ve got some new agent who doesn’t want to hustle and grow their business. They want to sit back and take all the leads from the internet people. That same agent is also taking a low salary to let the big tech companies get him, her or they all the leads for them. They’re presented to you like they’re a seasoned pro who’s on your side.
I had an Opendoor agent call me to ask me about one of my listings for his buyer. He had an interested buyer who was interested in taking a look at the home so he called me to see if he could show it because he was ready to bring in a competitive offer. The problem is that home sold in October 2021 and now it’s January 2022.
How hard was the agent working? What kinds of savvy did that guy have? How screwed are the poor buyers who find a home online then call a tech company and this is the pro they gave him? What do you think that agent is going to tell him when the buyer says, “What about that home? That one on the Bluffside that looks so great.” The agent is going to say, “Sorry, that’s sold a few months ago but I suck at my job. I didn’t know what a ten-year-old could know by looking it up online. Let alone the precise and intricate details I should know about the sales, the market and passing that information on to you.”
This is the information that is crucial and critical to help yourself. The bottom line is that new agents are not what you need and they’re not going to be able to help you with bidding wars. I don’t blame the new agents. I blame the system. I was watching a great video on the National Real Estate Post. It’s an industry video series that I’ve been watching for many years. Most of the time, the layperson wouldn’t even give a darn about what they say. It’s talking to realtors and lenders specifically to help us serve our clients better. I like that that’s what they’re about. That’s why I’ve been listening for many years. They are there to serve.
One of the things they talked about was that with this low inventory and sudden increase in realtors, they were as perplexed as I am. They talked about how the bar is too damn low to be able to call yourself a realtor. Many unknowing buyers are using people that frankly don’t have the chops to get it done in a regular market, let alone in 2022. They addressed why in this Great Resignation so many people are deciding to get their licenses and become realtors. I said greed.
They repeated some of the stuff I’ve been saying for decades that the bar is too low and let’s face it. What they said was the bar is higher for other jobs. That means you might have to work to get a good job so this low bar looks attractive. For many people out there, it’s too hard to become a dental hygienist so become a realtor. If you want to be a receptionist, you have to get there on time and realtors get to set their own hours. “Forget that, I’m doing that.” If you want to make good money and work as a bank teller, you have to work too many hours, “I’ll become a real estate agent work the minimum I can to get paid.” Harsh but that is a truth bomb.
You need to know what you’re getting. If you’re choosing your realtor solely based on their positive energy and how much you click with them in an open house, any yahoo can hold an open house. In fact, a lot of them do. Lots of new agents hold open houses to capture clients like you because they don’t have any other marketing or website or credibility to get clients because they’re brand new. Many open houses are held by the newbies without experience because they don’t have a reputation and a client base to call. They can’t call folks to try to get referrals for new clients. They have to pray on the hordes of people that are out there right now, standing in line to walk into the open house.
That’s the system and the system sucks but you can beat the system. It sucks because the industry is still stuck in the old days and they think less of buyers. They know you’re going to come to them when they advertise the home for sale. They focus on getting homes to sell and then they pass the buyers off to new agents who were barely passed a simple scan-drawn test to become what they call “licensed.”
[bctt tweet=”The only way to win a bidding war in 2022 is to find someone who understands the market.” username=””]
This was a warning for you from an advocate that’s been championing your costs for many years. Don’t go so deep into trying to figure out how you should be writing your counteroffer, adapting, changing and using tricks and tools to try to get your offer accepted. Shouldn’t that be what your realtor does? Spend more time in the pre-interview process than you do in the process of trying to learn how to do their job.
You need an advocate. An advocate is a person who publicly supports or recommends a particular cause or policy. That means someone who believes in the buyer, not in the paycheck. Someone who supports you and your cause with their professional experience. Not just someone that you have good vibes with or lots of free time that they seem to have because they can chat with you whenever for over-caffeinated excitability that unfortunately couldn’t negotiate you a popcorn stand with decent terms, let alone the biggest investment of your life.
I know that you guys out there are going into battle. I’ve got people calling me asking questions of what they can do and a lot of times they asked me these questions, they’re the end of the deal. I’m trying to do preventive maintenance here. I’m trying to start this early. You guys need to understand this stuff. It hurts me when readers reach out to me when they’re in the thick of it. They’re in negotiations on their dream home only to realize they have an unqualified representative.
I can give you all the tips, tricks and hacks on what to tell your realtor to write in the bidding wars. That information is all and what episodes 39, 41 and 46 but if you’re passing these tips on to your agent and it’s the first time that your realtor has ever heard of them, how effective are they going to be implementing them. Remember the first time you did anything? Do you want to be training your professional representative or an example I gave earlier? Not only not knowing how to write offers in a bidding war but someone who’s looking up homes that have been sold for a few months.
I hope this information is helpful to a lot of you out there. I’ve heard a lot of nice compliments and reviews. If you haven’t reviewed on Spotify, please do so. Especially for a long-time reader and you’re sitting in your brand-new home, still reading to this for fun. First of all, you’re weird and I love you but Spotify, started reviewing and it would help me out if you reviewed there. Even if you reviewed other places, drop it on Spotify. It’d mean a lot.
I’ve been getting a lot of nice feedback thanking me for not trying to sell you with pushy techniques and caring about your best interest. I can’t emphasize enough that my friends are calling me crazy. My phone’s ringing off the hook, people all over North America calling me for advice. The very first thing I tell them is I can only help you so far. You got to find a pro in your area that cares about you as much as I do.
That’s what I’m telling the people closest to me in my life who are calling me for help. That’s the first thing then I have to tell them, “I love you tons but I’m not answering any more of your stressed-out 3:00 AM texts because you think that we’re so close that you’re cool to drunk text me at 3:00 AM when you’re freaking out about buying a house.”
If you came here for advice on the bidding war and you want to learn how to be a realtor to do this, my advice is your realtor should be a realtor and they should know all the tricks on the bidding wars. They should have written offers last weekend, the weekend before that or the ten years before that. You need to interview better and be prepared earlier with an advocate helping you not only at crunch time but in the planning process so you can get yourself that unicorn realtor and mortgage pro helping you plan inside your safe and experienced unicorn bubble. That’s in episode 53Â if you’re looking for the definition of that.
Inside your unicorn bubble, when you’ve created this perfect little scenario and you have everything all lined up, now you’re set to go out there and go to battle with the bidding wars. You’re prepped, shiny and ready to be presented to the sellers of your dream home. You can drop that offer confidently. That’s my best bidding war advice.
If you are totally anal and you want the details of the process, it won’t surprise you when your unicorn makes some of these suggestions on how to handle your offer and counteroffers. You will be getting counter offers and be ready. That’s episode 39, 41 46 but if you want an advocate that already knows the tricks and is going to help you make your plan whether it’s one week from now or a year from now, hit me up on DavidSidoni.com or HowToBuyAHome.com, ask me your question.
Find me on Insta @DavidSidoni and send me a DM. Also, there are lots of great videos, graphs and tips there in my Instagram feed. You can scroll through that instead of spending an hour on TikTok, watching the newest trend. It’s good education. For the love of all that is bananas, if you want to win, find a unicorn by using the tips that I give you on picking a realtor or check with me to see if I have a unicorn in your area.
Unicornation is over 235 realtors, all over North America. We’ve helped hundreds of readers buy like you buy their first home. Every day I’m hooking up with more readers to get into battle. There are 260 readers who we’ve got attached to a unicorn. I’m stoked to say that they’re all preparing and getting closer to their keys every day. I’d love to help you enter this battle with a decorated field general to keep you safe. With them on your side, I am sure that you are looking in the mirror and you’re going to say, “You can do this.”
Important Links:
- Episode 39Â – Past Episode – How To Write An Offer For Your First Home Purchase
- Episode 41 – Past Episode – How To Write An Offer For Your First Home Purchase – PART 2
- Episode 46Â – Past Episode – Bidding Wars! How To Win Them
- Episode 6Â – Past Episode – How To Interview And Choose A Realtor Specifically For You
- Episode 53 – Past Episode – Real Story From A Real First-Time Homebuyer – Madison’s Story
- HowToBuyAHome.com
- DavidSidoni.com
- Opendoor
- OfferPad
- Redfin
- Zillow
- Perch
- Knock
- OfferDepot
- Zavvie
- National Real Estate Post
- Spotify – How to Buy a Home
- @DavidSidoni – Instagram
This podcast was started for YOU, to demystify things for first time home buyers, and help crush the confusion. After helping first timers for over 13 years, I knew there wasn’t t a lot of clear, tangible, useable information out there on the internet, so I started this podcast. Help me spread the word to other people just like you, dying for answers. Tell your friends, family, and perhaps that random neighbor you REALLY want to move out about How to Buy a Home! A really easy way is to hit the share button and text it to your friends. Go for it, help someone out. And if you’re not already a regular listener, subscribe and get constant updates on the market. If you are a regular and learned something, help me help others – give the show a quick review in Apple Podcasts or wherever you get your podcasts, or write a review on Spotify. Let’s change the way the real estate industry treats you first time buyers, one buyer at a time, starting with you – and make sure your favorite people don’t get screwed by going into this HUGE step blind and confused. Viva la Unicorn Revolution!
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