This is a great blog post from one of our sales associates, Terri Taydus. Terri works with a lot of buyers and has been amassing some great experience, tips and best practices in our very competitive market here.
To reach Terri’s blog directly – click HERE.
We are just barely three months into the new year, and I have already been asked countless times to predict the 2015 housing market.
The word on the street is that this year’s Boulder County housing market is not going to be any better than last year. Low inventory driving up demand and property values are predicted to continue to rise.
So what does this mean to you? It means you have to shop or list smarter. During this extremely competitive market, it is more important than ever that you work with a licensed Reatlor ®
Buyers: Speak to a lender and have a good understanding of what you can and cannot afford. Be realistic about the cost of housing in the area in which you are looking. With spring and summer right around the corner, there may be a bit more inventory but there will also be more buyers to compete with. Understand that the home that you may think is “perfect” will most likely be the perfect home for at least one other buyer – remember, they too are feeling the pinch of this tight housing market. That said if you are looking for a “deal” you may not be in the right market. Homes are selling fast, and many times with multiple offers for well over their asking price. There are strategies you can use to make your offer more appealing to a seller:
- Present your highest and best offer. Gone are the days (for now) when you can “come in low” and hope the seller will counter and the two of you can meet somewhere in the middle. Sellers are often dealing with multiple offers on a good listing. If you think you are going to come in low, chances are the seller will have a higher offer in hand from another buyer and you will never see a counter. Of course there are always exceptions to this rule and this is where you need your Realtor ® to guide you.
- Make sure you are communicating with your Realtor ®. Together, brainstorm some creative ideas about presenting your best offer. You may want to write a personal letter to the seller about why you want the home and how you can envision your family living there (be complementary). Appraisals can be problematic in a quickly up trending market – the appraised value may have difficulty keeping up with the actual market value – therefore electing to waive the appraisal contingency (assuming you can afford to make up any difference between purchase price and the appraised value – please talk to your lender), can ease a seller’s mind about a high offer and make your offer stand out. If you are coming in over the asking price you can do a hybrid of waiving the appraisal and state that so long as the home appraises for the listing price you will agree to proceed with the purchase (again, make sure you are prepared to bring any difference between the appraised value and the purchase price to the closing table in way of a larger down payment – please talk to your lender).
- Make sure you are seeing everything that is out there that meets your needs. Some sellers are cutting corners and listing their homes themselves or using a flat fee service to list their home in the MLS. Some real estate agents will not show these properties even if they are a good match for you. Have a discussion with your Realtor ® and make sure they are sending you EVERYTHING that may be a good fit for you and your family. This may mean that you will be asked to pick up the additional buyer’s agent commission that a seller using such marketing techniques is not offering (i.e. thus passing part of their listing cost on to you, the buyer), but if your Realtor ® points out any of these reduced commission listings as they send them to you, at least you will be the one making an informed decision about whether the home is right for you or not and if you would like to proceed with an offer. In this market you cannot afford to have a real estate agent selectively send you listings d upon their needs. You need to see it all!
These are only a few suggestions. In this market you need to be prepared to move fast and submit a strong offer when the right home comes along. This means you need to have liquid funds available if you are paying cash, or a strong pre-approval letter ready to go if you are securing financing.
Sellers: Use a licensed Realtor ® to list and sell your home. You will not be saving any money by listing the home yourself. Cutting corners and offering reduced commissions and limiting your marketing will only leave you scratching your head wondering why your wonderful home is not selling in today’s hot market. The time spent sitting on the market, the offers that don’t come together, and the risk of making a costly contractual or disclosure mistake far outweighs the cost of hiring a good Realtor ® There is a reason a good Realtor ® takes continuing education classes to keep up on the latest contract changes as well as all of the latest changes within the industry as a whole. There is a reason we carry error sand omissions insurance (and hopefully never use it). There is a reason we are licensed. Have you noticed the “®” symbol after the word Realtor ®? That is because not all real estate agents are “Realtors” ®. The term “Realtor”® is a registered trade mark and as a Realtor ® we are held to a higher standard of excellence. Realtors ® put a lot of time, education, and effort into learning how to market and sell homes. Why would you try to take on this dubious task with no level of expertise in this area?
- Be realistic. Just because the current market favors sellers, does not mean that marketing your home far above what it is actually worth is acceptable. Even IF you find a buyer willing to pay the inflated sticker price, you could be setting yourself up for appraisal problems down the line.
- Be smart when reviewing offers with your Realtor ®. Try to look beyond just the offer price and listen to what your Realtor ® is advising you. The highest offer is not always your best offer. How much is the buyer putting down? (a low down payment could indicate that they buyer does not have the cash to make up for a low appraisal if need be). What are the terms of the contract? Are they asking for a Seller Concession? Are they waiving any of the buyer contingencies? Are they using a local lender that uses a local appraisal management company? Do you understand the importance of all of the above? There is more to an offer than price alone. A high priced offer will not do you any good if it never makes it to the closing table.
- Take backup offers. Talk to your Realtor ® about how empowering a backup offer can be to a seller!
- Sell a good product. Do not expect a buyer that is paying top of the market value (or more) for your home to be okay with a laundry list of inspection items that you won’t fix. If you are going to expect top dollar, then be prepared to deliver a home that is worth the price.
To reach Terri Taydus, CNE –
(303) 345-3256 – Cell (Best way to reach!)
(303) 443-3377, ext 8828 – Office
Download Terri’s FREE app and search for new listings like a pro! Just text the keyword: BOULDER to 32323