Bidding wars, offer review dates, and not a cash buyer…why even try? If this inner dialogue sounds familiar, you are not alone. After missing out on several properties, it is common for buyer fatigue to set in. Positioning yourself for success takes understanding the current market conditions. These conditions present a complex series of decisions for buyers and sellers to discuss with their brokers. Let’s look at seven common misconceptions I hear from clients I represent on a regular basis.
There is no inventory.
Opposing popular belief that inventory is non-existent, yearly sales figures in Anacortes have remained surprisingly consistent. In fact, MLS figures from 2018-2020 show a slim 7-property variance in annual home sales with an average of 447 properties selling every year. Year-to-date, 2021 is in alignment with sales figures from these past three years. There is indeed inventory in Anacortes; it simply moves on and off the market faster than most people realize. Blink, and you’ll miss it.
Offer details are confidential.
To the contrary, a listing broker with the seller’s permission may elect to disclose elements of any competing offer to better their seller’s position. Details such as price, loan type, down payment, closing/possession dates and general addenda (or waiver thereof) are often selectively disclosed at the negotiation table. Other times, a listing broker’s decision to keep details private can encourage a buyer to offer well over the price needed to secure the home.
We will schedule to tour this home next week.
Time is not on your side as a buyer. The average home this past July had eight showings before the seller accepted a contract. That can easily be accomplished in a single day. To be competitive in today’s market, you need to be prequalified by a reputable lender and tour the property within the first 24-48 hours. Ultimately, variables such as price point, location, and uniqueness of the home all play a role in offer review process and the amount of time a buyer may have to explore any given property.
Cash is king.
A cash offer brings two distinct advantages to the seller; the possibility of a quick close date, and a waiver of the bank’s appraisal process. If the seller is focused on a quick close, a cash offer is hard to beat. However, many cash buyers expect a deal, while financed buyers may be willing to take out a larger loan at the expense of a higher purchase price. Buyers may also elect to negotiate the amount of increased down payment they are willing to pay to offset the seller risk of a low appraisal effectively neutralizing that element of a cash offer. Finally, it’s helpful to remember that the proceeds of a sale are always cash to the seller in the end. Would you as a seller wait an additional 10 days for $10,000?
The market/process is the same.
What was customary last year or in other states often isn’t necessarily true today. Real estate markets can see significant changes in a 9-month period. Our statewide forms also see regular amendments that restructure your options as a buyer or seller. In 2020, we saw significant form revisions with over 20 statewide forms updated.
We can renegotiate price based on the home inspection.
While it is common to have a furnace serviced or water heater strapped, many negotiations end there. Concessions can be few and far between, so know your thresholds and be ready to make a few more concessions than if it were a neutral or buyer’s market. A pre-inspection, pass-fail, shortened timeline or waived inspections are all considerations to discuss with your agent. There is always another buyer in this seller’s market with a different set of goals and timelines. Knowing this, sellers are less likely to make large concessions with any one buyer.
Expecting a seller counteroffer
As a buyer, don’t expect the courtesy of a counter offer or comprehensive upfront dialogue. Best and final offers are the industry standard in our current seller’s market. Expect competition against your offer, and place your best foot forward.
Soaring real estate home prices and multiple offers situations present unique challenges to even the most seasoned buyer or seller. Professional representation has never been more important to help educate and guide you towards the best options and possible outcome.
Rob Skelton is a top ten agent at Windermere Anacortes. He is an Anacortes native and has been in the real estate field for over 15 years.