How did this get so out of control?
What started out as strategic home pricing for sellers to get more than one offer, has exploded into a full scale war involving historically low housing inventory. Bidding on homes for buyers should not be a war. Adapting during the pandemic should not result in damage control. So now this…
When pricing a home for sale, if it is too far below market value it is a disservice to all involved. We must look at all aspects of the home’s market. Trends happening in a particular neighborhood, absorption rate to determine level of inventory, and the pricing of active and pending properties for accelerating market clues. When that home is too far below where it will sell, there are too many offers and too much noise.
It is a known fact that buyers will overpay for something that they absolutely must have, however, some buyers are not willing. It has been frustrating, and challenging for buyers and buyer’s agents since the asking price is no longer the baseline for the preapproval. It can be as high as 10% greater than their top buying power number! The tactics that buyer’s agents must use for the offering process is now a much more involved conversation. It may sound like this: “The list price is 500K, the sale price could be 550K.” How does the buyer proceed? That’s when you ask an expert!
Due diligence is part of the process and now a word about the appraisal. Comps, what comps? Comparable properties are sometimes non existent. How will an appraiser value this home? Will it appraise? Is this negotiated with the offer? Will the buyer’s attorney agree?
Exhausted, defeated buyer’s agent are in the trenches daily fighting to get their offer in. Listing days on market =1, accepted offer, no more showings? How is this possible? Are listing agents being fair? We do not know what their conversation was with their seller client however this sends a distress signal to the buyers. They are as stressed, disappointed and frustrated as everyone else! It is our responsibility as Realtors to let sellers and buyers know what to expect. It takes extraordinary skill to navigate this war and reassure all participants. Both buyers and sellers need a “team” to show that they are ready, willing and able. Realtor, inspector, attorney, loan officer, title rep must all be in constant communication.
An agent compared this to buying concert tickets back in the day. Show up early, get in line, have your money ready and expect not to get the front row seat! For buyers in this insane market, have a preapproval that is less than 30 days old, have money in reserves to combat low appraisals, line up the inspectors, the attorney and be sure that you are flexible with closing. Sound like the perfect storm? It may very well be and this is still no guarantee!
Want to learn more about how to approach this market? Contact us for the latest on the market! 914-666-7792.
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Elisa Bruno-Midili is a co-founder and partner at Cafe Realty. She is also a Score Certified Small Business Mentor and advocate for collaboration. Knowledge, expertise and strategy is backed by a 34 year real estate career. Click here for my Instacard