EXTREME HOME COASTER ALERT!
The current real estate market in the areas I serve is quite the roller coaster ride for buyers and sellers alike!
As a real estate professional, it is a challenge to help clients navigate such a unique environment. We are in a position where we have to partially set aside data and statistics and rely on our gut instincts.
Many of you are aware that my focus markets are in Philadelphia and those communities just over the bridge in New Jersey. What I am seeing in many neighborhoods is an increased buyer demand coupled with an incredibly low number homes for sale. This is a recipe for bidding wars and surging property values.
For home buyers, the frustration is real! Buyers are anxious to take advantage of the low interest rates, but with the high demand and steadily increasing prices, many are nervous about over investing in a home. It is also never fun for a buyer to make such a big decision in a quick timeframe only to be one of multiple offers competing for the same property.
WHEN YOU ARE putting forward STRONG offers, YET Losing out on house after house after, IT IS NATURAL TO FEEL DEFEATED.
STAY OPTIMISTIC! The right house will find you! All those other properties you weren’t selected for were simply not meant to be.
I have a few examples of buyers losing out on one house after another only to ultimately land in a house that was absolutely perfect for them and their lifestyle! The house hunting path may be bumpy, but if you stay focused, it will always lead you home.
Sellers Market
For home sellers, it is exciting to receive multiple offers within days of listing their home. Having buyers line up willing to offer you over your asking price can feel like you won the lottery. However, sorting through various creative terms and choosing the strongest buyer can be stressful. Remember, the highest bid is not always the strongest buyer. The ‘strongest offer’ is the one that is most likely to close smoothly with the best profit to the seller.
I also caution Seller’s to be realistic with the complete process… Offer to Close. Once you accept that offer, there are still a few hurdles along the way to the settlement table. Be prepared to assist with any unexpected defects in the home. Be prepared to address any issues your township requires to be corrected.
Yes, it’s exciting to get a great price for your house, but let’s be fair to the buyer who is paying top dollar and assure them a safe and structurally sound property.
What about the Appraisal?
You may be thinking… the offer price doesn’t really matter because a property will still need to appraise right?
Short answer is yes, if there is a mortgage involved, the property will have to appraise in order for a lender to clear a loan. HOWEVER, because of the low interest rates, todays buyers have more buying power. We are seeing many buyers in a financial position where they are able to cover at least part of the difference if there is an issue with the appraisal.
So… a closed price may be higher than the appraised value. Then we have higher sold prices, which are the prices appraisers are using when completing their valuations. This is leading to an entire market shift in certain communities.
I expect this environment to continue through at least the fall of 2021, however I do hope that we see more homes listed to help cool the battlefields a bit!
Tips to navigate this market
Manage your expectations! Understand what is happening in the market and recognize the challenges that you may face. Having this understanding from the beginning will help you maintain some level of calm through the process.
Have a clear vision of what you NEED versus what you WANT.
Listen to your gut! If a situation doesn’t feel right… it isn’t. Be patient and keep your business hat on when on either side of the transaction.
HAVE A STRONG AGENT ON YOUR SIDE. I’m not just saying this as a Realtor… I honestly can’t stress this enough. Having an agent who can help you navigate this market, who can set your expectations, who can guide you and advise you every step of the way is invaluable!
Is now a good time to get into buying or selling a home?
This may all sound scary and discouraging, but I am not at all trying to deter you from taking advantage of this market! I simply am being honest and setting your expectations.
It’s a fantastic time to sell and get top value for your property!
With interest rates so low, I’ve heard many calling loans “Practically Free Money”. It’s a great time to invest in a home!
Everyone’s situation is different. If you are unsure if now is the right time for you to either buy or sell a home, please reach out and we can talk through it!