By Ron Caplan
When housing supply is short and demand is high – as it is these days -- homeowners can be in the lucky position of having a quick sale and, possibly, multiple bids on their property or cash transactions. They may even sell their house for more than the listing price. For buyers, a seller’s market means rising above the competition to shine as the “best” buyer – but it’s not all about the money.
In either case, for a buyer or a seller, professional guidance from a Realtor® can help your transaction go smoothly. But especially in a seller’s market – when a bidding war can break out and multiple offers are in play-- the professional ethics and rules of the real estate world are called into sharp focus. The pace of the process – showing and shopping, negotiating and making offers – can be brisk and emotionally challenging. A licensed broker can reduce stress, manage the process and keep things in perspective.
First: How do we define a seller’s market? Recent data from the Columbia-Greene Board of Realtors® tells us this: Compared with the January-May 2016 period, new listings (supply) are down by 15 percent, pending sales are up 13 percent, and “days on the market” are down .7 percent. The average sales price in our area is up 15.5 percent, and the supply of houses on the market was 30 percent lower in May 2017, compared with May 2017.
The good news for sellers is that now is a great time to sell, so if a lifestyle change is on your horizon, it may be a good time to accelerate your plans. With prices on the rise, a Realtor is best qualified to help you set an asking price for your home. He or she will research “comparable” homes sold within the last six months to help you target price that will give you a quick sale – or a price that may allow you to push the “asking” limits, due to demand. However, a seller who plans to buy something else will then become a buyer – in a buyer’s market – so buyer advice from your Realtor will be crucial.
If you are a buyer, find a buyer-broker who is experienced in managing bidding wars and multiple offers, and ask him or her for some examples of their work in competitive conditions. A good buyer-broker will have the experience to position you as the best buyer for your dream home, and will guide you through the process.
Unless you are fortunate enough to be a cash buyer, your broker will urge you to get pre-approved for a mortgage. Pre-approval is more rigorous that pre-qualification: it signals to a seller that you have already received a mortgage commitment and are financially positioned to close the deal. This gives you a leg-up over other buyers who may not have mortgage qualification. And, pre-approval gives you a limit on the mortgage you can qualify for, so your price boundaries will be safely in place.
A buyer-broker will also advise you to be cautious in adding too many contingencies to your offer. While you should never forego a home inspection, it may be harder to use the results (a bad furnace, an old roof) as negotiating tools to lower your offer. But an inspection gives you the the benefit of knowing what work your new home may require and how much it may cost. Also, if your purchase is contingent upon the sale of your own home, you might be a less attractive buyer. Your buyer-broker can help advise you on this critical contingency decision.
Finally, your broker will be the person to deliver your offer to the seller. Will he or she do this in person, or via email? What personal touch can he or she bring along with your offer, if there are other offers on the table?
Sometimes a buyer agent will ask her clients to provide a personal statement about why they are passionate about a home that is drawing lots of offers. A letter of interest, with a family photo and a personal story, can sway on a seller who has an emotional investment in the past and future of their home.
Whether you are buying or selling in a seller’s market, don’t forgo the expertise of a licensed Realtor. It will pay dividends and streamline the process of helping you to sell at a great price, or to buy into the home of your dreams.
Ron Caplan is president of the Columbia-Greene Board of Realtors, found at columbiagreenerealtors.org