July 19th, 2014 10:21 AM by Taydus Taydus, AHWD, CNE, CRS, GRI
What the heck is happening in the world of local Real Estate?! Part 2 of a 3 part series J
As we explored last week, many buyers are experiencing frustration over the local market and the lack of available inventory. I work both Boulder and Broomfield counties and have seen both markets (especially Boulder) hit with low inventory and rising home prices. There are multiple factors that are contributing to the situation:
Sellers are hesitant to sell for fear that they will not find a replacement home.
Low inventory is putting sellers in the driver’s seat, and is encouraging them to list for an inflated price.
The market – especially within the City of Boulder – is flooded with sophisticated buyers that can often afford to pay cash for their purchase, thus paying the high prices sellers are demanding. This makes it complicated for a buyer that needs to finance to submit a competitive offer.
Each new sale at an inflated price raises the bar for the next listing – each sale continues to build upon the last, causing home prices to keep rising.
For now, this is the nature of the local market. So you have outgrown your home, and you are ready to move up…what should you do? This is part two of a three part series that will take a look at some suggestions as to how to best navigate today’s market based upon the unique needs of the seller / buyer looking to move up. Please check out next week’s blog when we discuss the unique needs of the “Getting Ready to Downsize” buyer / seller J
Selling and Moving Up!
This can be a very exciting and also a very stressful time; often times buyers in your position need to close on the sale of their current home, in order to purchase their new home. Timing is everything. Having an experienced Realtor to help coordinate the sale of your home with the closing on the purchase of your new home is imperative.
Get your finances in order. If you are financing your purchase, you need to speak with a lender ASAP. A good lender can advise you how to best structure your loan and assist you along the way so you avoid any pitfalls that could potentially derail your financing. Your lender and Realtor work as a team to make all of the pieces fall into place. You may also have financing options available to you just in case you find that “perfect home” and need to submit a competitive offer before you close on the sale of your current home.
Check out my Service Provider Directory for the names of some reputable, local lenders!
List your current home. Once your finances are in order and you understand your options, put your home on the market and start looking for your new home. This is where communication with your Realtor is imperative. There are options that may be available to you that you are unaware of. You may be able to delay the closing on the sale of your home, or do a “rent back” to give you extra time to find your new home. These options allow you to move forward with the sale of your current home (and not miss out on a strong seller’s market) and still have time to find a replacement home.
Be realistic! As a seller you need to be realistic about the condition of the home you are selling and price it accordingly – this is where you need to trust your Realtor, remember your Realtor is there to help you and they want to see you succeed! Be realistic about what you really need to get for your home (this may be very different from what you “want” to get). In this market you will hear a lot of stories from well-meaning friends, neighbors, etc. about the value of your home. Your Realtor will discuss the most recent comps with you and go over what you can realistically expect for your home based on your home’s current condition, location, and what the market in your area will support. Keep in mind that getting greedy based on market hype will benefit no one, and could derail the sale of your home and stall your plans to move on. Stay focused and don’t lose sight of your objective; to move up into your new home / location.
It is also important that you stay realistic as a buyer. Moving up into a more desirable neighborhood / school district and / or into a larger home may mean that you need to see the “potential” in your new home. It can be difficult to leave behind a home that you have improved and fixed up, only to purchase a new home that needs paint, or maybe a kitchen / bathroom remodel. But try to stay focused on the reasons you are moving; more square footage, better public schools for the kids, a bigger yard or garage. Staying focused will help you see past any eyesores that can be remedied in time. Remember, updating a kitchen is doable. Location and school districts are not something you can “fix” but will help you gain more equity in your new home. Keep your eye on your motivation for moving and what is important.
The good news is that you may get more for the sale of your current home. The reality is you are probably going to pay a little more for your replacement home.
Most importantly work with a Realtor! We are the ones that are out here working the market day in and day out. We see the different scenarios and can advise you about market value, and what strategies work best. Remember, your Realtor is on your side and wants to help you J
Even with the challenges of the current market there are steps you can take to achieve your goals if you are willing to be realistic, keep an open mind, and stay open to new possibilities!
Again, it is more important than ever to engage the services of a licensed Realtor that is accustomed to working with buyer / sellers that need to sell in order to buy, and can assist you with your unique needs. You will need to be ready to act quickly when the right home comes along. Your Realtor can help you so you are prepared and don’t miss out on that “just right” home.
I work with both buyers and sellers and am available to answer any questions you may have!