I wanted to take a moment to discuss how our real estate market is changing here in the Triangle.
You have heard me talk before about how our market was the last into the recession and the first out. And I have talked about how our market has recovered nicely since then. As such, to date, when a home is priced well, the sellers are getting 97% to 98% of their asking price.
I recently made the decision not to work with a prospective buyer because he wanted an agent who would “play hardball” with the sellers, his plan being to offer around $50,000 less than the list price on homes that were priced in the $350K to $400K price range. He has no experience in purchasing a home and yet has gleaned from somewhere that he can get this low of a price, regardless of whether the home is priced well for this market or not. And further, any realtor who recommends that he pay list price is only looking out for their own commission. Not only does our code of ethics dictate that we always put our clients’ bests interests ahead of our own, North Carolina law also dictates as much. I could not convince him that is approach would be counter-productive and we decided that we would not be a good fit to work together in his home search.
So, why share this information with you now?
In the past week, I have presented three offers for three different buyers and we have either lost out on the home or walked away from the home because of the fierce competition amongst buyers for the home. On the first, we offered $5,000 over the asking price and lost out to another buyer who offered more. On the second, we offered well below the market value, even though I strongly advised my buyers against it and so offended the seller that he called our offer “pathetic” and refused to have any further discussion with us. On the last, we offered the asking price, but the seller then wanted to wait for more offers, gave us an incredibly short turnaround time to complete our due diligence (research of the home), asked for a much larger amount of due diligence money (more risk to the buyers) and asked for our highest and best price. We truly do not believe that the home will appraise at its asking price, let alone for an even higher number. Nor did we want to put ourselves in the situation of risking more money for not enough time to research the home. We made the decision today to withdraw our offer and walk away from this home. I have no doubt some buyer will indeed agree to those terms and they will be under contract. It just won’t be my buyers.
In addition to this type of activity, yet another buyer of mine and I went to look at a home just listed that was pretty much close to perfect. On the first day the sellers allowed anyone to visit, there were at least ten showings in addition to ours. Upon visiting the house, we had some concerns over HOA rules, so we opted to research it further before putting together an offer. This morning, less than 24 hours after listing and having had at least ten showings, the listing agent announced that the sellers had accepted an offer last night.
The tide is turning in our real estate market, my friends. I am not alone in these experiences. I have spoken to several other agents who are experiencing the same shift in availability of top quality homes and, as a result, the market value of those homes.
Now we are no longer looking at homes that are getting just below their asking price when they are priced well. They are getting equal to or more than their asking price.
So for buyers, be aware… when a home has been taken care of, maintained and updated, and is priced well, it will be a hot commodity. Expect to have to compete to get that home. Have a plan as to how you will handle it if you end up paying more than the appraised value. Let your realtor guide you as to how you can get the home that you want for a fair price and still keep your own risk to a minimum. That, or expect to have to purchase a home that you will have to put some work into…particularly if you don’t want to be put in the middle of a multiple offer situation.
For sellers, now would be a good time to list your home for sale! That being said, if you want to get top dollar for your home, listen to your realtor and get a home inspection. Fix the things that need fixing. Take the advice of a stager. Take the time to prepare your home for the beauty show of its life. Come on the market in good condition, looking your best and priced comparably to recent sales of homes in your area. In this market, if you take the time to do these things, you may well be on the receiving end of those multiple offers and able to get top dollar for your home.
As the season progresses, I will keep you updated on how this market, and its shift, is working out. And as always, I am here for any of your real estate needs, questions or concerns.