There has been a shift in the Real Estate Market.
When the Market crashed, the Housing Market almost came to a complete halt. Houses for sale sat forever, some did not sell. Borrowers, not adequately qualified to buy, from a severe lack of Regulation on the part of the Banks, defaulted by the millions.
The market became flooded with Foreclosures.
The Banks began to heavily regulate to avoid future issues.
(Heavily regulating the homes they were lending on, and the Individuals they were loaning money to.) The Borrowers getting loans, were suddenly verified, and more qualified, stable Individuals. Perhaps that has led to more Homeowners staying put longer.
Since more stable Borrowers are staying in their homes longer, it appears there are less homes for sale. With Buyers seeing the rates rise faster & more often, there appear to be more Buyers wanting to buy, to avoid having to pay a higher rate, which is sure to come.
Thus where we are today, is now a Seller’s Market.
If you are selling a home that is not overpriced, and does not need tons of repairs, your home will sell very quickly.
There currently seem to be more Buyers, than there are good, move in ready homes for sale.
Some of the higher price ranges, $350k & up, are still sitting awhile, because there are fewer Buyers, the higher you go in price.
If any home needs lots of work, it will sit for awhile, because Banks are more strict today on the condition of the property. Even if a Buyer wants a project to work on, the Bank, in order to protect future investments to avoid another housing crash, will likely reject a loan on certain homes that need certain types of repairs.
Red flag words to Underwriters (those that back loans), structural damage, roof leaks, termites, just to name a few.
The House Flipping business has become very popular, but is more of an option for the all cash Buyer.
Many Buyers today are having trouble finding a move in ready house, and when they do, it appears to vanish before they can make an Offer. Or they find the house they want has Multiple Offers, and they have to Offer well above full price & ask for no repairs, to even get the house.
Here are a few tips to help you win your Offer in this crazy competitive environment of buying a house:
1. Have your Buyer’s Agent (that would be me) put you on a Automatic Alert, of any homes that hit the market that satisfy your criteria, and be prepared to drop whatever you are doing to go see it that very minute. Be prepared to make an Offer immediately. Time is of the essence in a Seller’s Market.
I can show you property listed with ANY Real Estate Company.
2. Don’t try to bargain or negotiate on price. If there are multiple Offers, your chances of getting a deal on the price is slim to none. If you want the house, pay the Sellers what they are asking. You don’t have to, but you likely won’t win, and don’t even count on getting it for full price in this market. Many Buyers are willing to pay above full price, because there are fewer houses for sale, than Buyers to buy them.
(What is more important? Getting the house you want? Or getting a deal?)
3. Don’t ask for repairs up front. The Seller will take the path of least resistance. If there are multiple Offers, there is likely one on the table that won’t ask for repairs.
4. Don’t ask for a Home Warranty. Time is a huge factor. If you can get a Contract signed on the house, once the Inspections are complete, and after the Sellers have boxed everything up, they are then more likely to provide a Warranty if you wait until then to ask. They can always say no, but if you try to get this up front, it might decrease your chances of winning the bid. Don’t count on the Sellers for this in this market. Sometimes Sellers are really nice, and if you give them time to get over being angry about being asked, they might pay for a Warranty in lieu of or in addition to a few repairs. (You can always buy your own Warranty.)
5. Lower your expectations. The Sellers have the power, as long as it is a Seller’s Market. You can ask for lots of things, but with so much competition, (so many Buyers competing for homes), they will be less likely to fix things, or offer money for repairs. Don’t make Offers on houses that need repairs that your Bank will require to be addressed. Don’t count on the Seller to fix items that have not already been fixed. Have your Buyer’s Agent help you avoid homes that won’t pass with the Bank as is. Or have your Buyer’s Agent help you obtain the proper type of loan to address the repairs needed.
6. Have your Bank PreApproval (not PreQualification) ready!
Sellers will most likely choose an Offer from a Buyer who has been PRE-APPROVED. PreApproved is when you have provided Documentation & Proof of your Income, Tax Returns, Debts, Credit Score, etc. A PreQualification is not as good, because you have simply “told” your Lender about all these things, but have provided no proof. If you are an all Cash Buyer, please have your proof of funds letter from your Bank, ready to go. Offers are not accepted on a promise. With so much competition for homes, there is no need for Sellers to take risks on unqualified Buyers.
7. Make your Non-Refundable Deposit as high as you can stand for it to be. The Sellers will be inconvenienced if the deal falls through. The House that falls through and goes back on the market scares people. So not only will the Sellers lose time, but likely a lot of qualified Buyers the 2nd time around, and might have to drop their price. The Deposit will hardly cover this loss in most cases. Make your Deposit amount strong.
8. Make your Closing Date as soon as possible. Sometimes Sellers choose an Offer not based on the amount offered, or even the Deposits, but the Closing Date. The Closing Date could affect whether they have to make an extra payment or not. Close as soon as possible to win that Offer!
9. Don’t ask for Closing Costs! If you ask for Closing Costs in Multiple Offers, most likely it will totally kill the deal. I recommend saving as much money as possible, in order to have your Closing Costs & Down Payment ready. Financing your Closing Costs is more expensive for you! It doesn’t do any good to put a whole bunch down, if you are going to turn around and charge your Closing Costs.
10. Be courteous. Don’t try to get the Seller over a barrel with something late in the game, it could backfire!
Here are a few tips to make sure your Home gains Value, even if you have to pay full price, or over pay for the home today:
1. Make extra payments. Making one extra payment per year reduces a 30 year loan commitment to approx. 22 years. Making 2 extra payments, reduces a 30 year loan commitment to approx. 17 years. Making extra payments will ensure you walk away with something & don’t have to bring money to Closing.
2. Try to live in your home for at least 5 years. If you live there less than 5 years, especially if you don’t make extra payments, you might be lucky to break even.
3. Take care of the house! Make repairs when repairs are needed. A home will not sell for top dollar if not maintained. NO Buyer wants to buy someone else’s problems!
4. The Housing Market goes up and down. It’s been going up for a long time. At some point, it could go down again. If you experience a downturn, don’t try to sell until the market goes back up.
5. Watch your neighborhood. If your neighbors stop caring for their property, if their grass suddenly grows neck tall, if they start having cars on blocks in the yard, or piling up junk, get ready to get out of dodge. It might be a good idea to sell out, if the neighborhood begins to decline.
Buying or Selling a House in NC?
Call Donna Hughes with Keller Williams Realty 336-953-5462
Donna can show you any house listed with any Realty Company, & is available 7 days a week.