For those of you who might not be in the market to purchase or sell a home, you might be blissfully unaware of the market we are currently negotiating through in North Texas. Called a "Seller's Market," there seems to be more buyers of homes than there are homes for sale. This creates a few interesting situations. For one, it drives prices for homes up. Secondly, it creates a competitive market for buyers who are all vying for the same low inventory of properties. Lastly, it can create false expectations of sellers when they do put their home on the market.
I received a response today, after asking a fellow Realtor about a home that was still in "active" status (meaning, the property has not gone under contract yet). When I asked if she was working with other offers, the response I received was, "Yes, she's received one, but she's waiting until Monday to see if she receives anymore." This irked me a bit, because I wonder what this market doing to the expectations of sellers. It is almost expected that if your house goes live on the market, you will get multiple showings and multiple offers right off the bat. This scenario does present itself quite often. But buyer's agents often have the disappointing position of constantly having to figure out how to best present their clients offers to sellers who are expecting not just one full price offer, but several offers, all over asking price. It's certainly a difficult situation for both parties. Here are some tips to help you if you are thinking about buying or selling your home.
1). Even in a seller's market, you can still overprice a home.
Right now, home prices continue to soar. Even agents can have a hard time figuring out exactly how high to list a house when appraised values continue to come back higher and higher for each home. However, there is still such a thing as a home being overpriced. Even in this market, I can't accentuate enough the importance of pricing your house appropriately. The last thing you want is a home that is sitting for weeks in a market that is supposed to be incredibly fast for sellers. Rely on your Realtor's comps and allow them to show you reasonable comps that can support the appraised value.
2) All you need is one good showing and one good offer.
It is very dangerous when sellers will only respond to offers when they have more than one. There are still ethical ways of negotiating offers in this market that are fair to both parties. If someone has looked at your home and provided you an offer, do not wait for days for other offers to come through. Respond to the offer and negotiate with the party that is interested and who has quickly attempted to purchase your home. Making a buyer wait in this market is not only a waste of their time, but a waste of yours as well. If you have a solid offer, with a solid lender approved buyer, see if you can't work that offer out first, before waiting for others to come in.
3) List the house for what you expect to receive.
If you want $175,000 for your home, and the comps support $175,000 for your home, expect to receive $175,000 for your home. If the expectation that you can list your home for $175,000 but expect to receive offers at $185,000 or higher, then you might be setting yourself up for a disappointment. There is nothing wrong with listing a home as high as you can. In fact, you should list it for as high as you and your Realtor think you can go. Just set yourself up for appropriate expectations before listing and allow any offers over asking price to simply be icing on the cake, not the expectation.
4) The highest offers aren't always the best offers.
What matters more than anything is the bottom line you will walk away with on closing day. Sure, you might get an offer over asking price, but what all are they asking you to do to the home before closing? What all are they expecting you to pay for in the contract? Are they solidly preapproved? Do they have the funds to close the home at the agreed upon price, should the house not appraise with the bank? Realtors are going to help you, step by step, walk through the terms of the contract to see which offer works best for you. Sometimes, the offer accepted isn't always the highest, and that is OK.
5) As a buyer, don't look for homes you can't afford.
I can't stress this enough - look within your means. Many buyers move forward with the full amount a lender has approved them for. Your monthly payment to the bank isn't the only thing to consider - what are the taxes? How much is the insurance? A lot of people purchase a home at the highest end of their budget, only to be sorely upset next year at tax time, when the property taxes have increased, and so have their payments. As your Realtor about these things when shopping around.
6) Please don't use HGTV as your Real Estate educator.
The scenarios on these programs are staged for camera. Very rarely in this market will a seller negotiate on price, especially if the house has only recently come on the market. This is true for both buyers and sellers!!
7) Use a trusted Real Estate Agent who can help you navigate through the process.
Realtors aren't only useful to take pictures of properties and show homes to you. In fact, where they are most valuable is after those things have already been done. From the beginning of the process, a Realtor will use their experience to guide you through the offer, explain the contract and what you will be contractually obligated to pay for and accomplish prior to closing, to help aid and encourage the title company and lenders to stay on deadline and provide them any help they need during the process. to continue negotiation with the other party throughout the process and to ensure both parties get to the closing table.
If you are thinking of buying or selling a home, let me be your Realtor! I can help walk you step by step through the process, ensuring an easy transition for you and your family!