Real Estate News with Terri Taydus, GRI, CNA

Home Buyers (and Sellers too!) - Surviving Today's Competitive Real Estate Market

March 22nd, 2016 2:48 PM by Taydus Taydus

 

Today’s market here in Boulder County (and across the nation) is creating challenges for home buyers and home sellers alike.  It can be difficult for a new (or even a seasoned veteran) to understand the nature of the current real estate market.  As a Realtor® who works with many home buyers, it is difficult to convey just how extremely competitive this market is without sounding pushy or like you are inflating an already challenging situation.

 

The truth to the matter is that in today’s market, using a Realtor® to buy or sell your home is more important than ever.  Home buyers (and sellers too!) are up against a whole host of challenges that are nearly impossible to navigate without the help of a professional Realtor®.

 

As a home buyer you need to be aware of what you are up against, and what strategies competing buyers may be using:

  • In most of the local markets, gone are the days when you can negotiate a price under asking. In most cases homes are selling for 5% and 10% above the list price, and for some very desirable locations and price points even more than that!
  • The inflated home prices are causing issues with appraisals. Savvy buyers and home sellers know this, so in order to make their offers more attractive, potential buyers are often waiving the appraisal contingencies – your Realtor® can explain the pros and cons of doing so. CLICK HERE to be directed to a recent news segment about appraisals in the Denver market. The article suggests “disputing the appraisal with the original lender” – please keep in mind this only works IF it is a bad appraisal and IF there are available sold comps to justify the value of the home you are purchasing. It is a waste of both yours and your lender’s time to dispute an appraisal that used the best and most recent comps.
  • If you are financing your purchase, you could be competing with cash buyers. Cash is king and is almost impossible to beat unless you are able to come in at a significantly higher price and waive some of the contract contingencies – again this is where your Realtor® has great value, as they can advise you of the consequences that come with waiving certain contractual contingencies so that you can make an educated decision.
  • Some buyers will waive the inspection contingencies (although I do not recommend doing so unless you are extremely competent in assessing the condition of the home).
  • Some buyers are electing to choose the title company and pay all of the seller’s closing costs – they are doing this vs. paying a higher purchase price to avoid potential appraisal issues. Some are doing a combo of both – paying over asking AND choosing the title company and covering the seller’s closing costs.
  • When was the last time you wrote a good “love letter”? As corny as it sounds, potential buyers are pulling out all the stops! They are including letters to the seller with their offer telling them how much it would mean to them if their offer were accepted. Some are going as far as to include photos of themselves, their family and even their dog.

     

    CLICK HERE to read a great article entitled “Lack of Inventory Challenging Many Housing Markets”.

    CLICK HERE for to read a very informative article posted to Realtor.com entitled “First-Time Buyers May Face a Difficult Spring”

    But it is not all doom and gloom!  You need to enlist the help of a professional Realtor® that is familiar with the market you are purchasing in.  If you work with your Realtor® you will come out victorious…it just may take a few tries.

    SELLERS:  Many potential home sellers think that with the high demand they can sell their home themselves.  But ask yourself:

  • Do you know what to look for on a purchase contract? There is MUCH more to consider than offer price alone, and there have been new changes to the Colorado Purchase Contract in 2016. Do you have full understanding of these changes?
  • Do you know the difference between a strong buyer and one that is maybe not as financially stable?
  • Do you know the difference between a reputable local lender and a lender that doesn’t know the local market, and the value and disadvantage of each?
  • What are your options if the appraisal comes in low?
  • What steps can you take to help avoid putting your home under contract and loosing valuable market time, only to have the purchase terminate in the 11th hour?

A good listing agent knows and understands all of the above and is worth the cost of commission.  It greatly benefits you to list your home with a licensed Realtor®

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Posted by Taydus Taydus on March 22nd, 2016 2:48 PM

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