Fact: It’s a strong-like-bull seller’s market.
If you’re currently looking at homes online or in person then you know available listing inventory is at an all time low. Qualified buyers can’t find what they’re looking for. This is a fact throughout The Woodlands Area, Montgomery County and Houston in general. You can read about what’s going on HERE and look at local home sales data HERE.
Beginning in 2008 and up until a few moons ago it was a solid buyer’s market. Buyer behavior included taking their sweet time, slow playing intrest, negotiating tough and dictating terms. Buyers had a broad smile and two hands on the steering wheel. Today’s reality is 180° different. Today’s market realities have shoved sellers into the driver’s seat. While the reversal from buyer’s market to seller’s market has been swift, this transition is part of the natural boom-bust-boom cycle and nothing to fret about if you’re a buyer. Unless you behave like you’re in a buyer’s market instead of a seller’s market that is. The good news is that this is the beginning of the next UP cycle. Prospective buyers who adjust their homebuying strategies to succeed in today’s seller’s market reality will find their dream home first, negotiate favorable|fair terms and move into their homes with the knowledge that they will participating in the new UP cycle.
Those that don’t, won’t.
A few (but important) tips on winning behaviors and realistic expectations in a seller’s market
Home Search, Selection and Inventory: It’s thin. When fresh inventory hits the market you’ll want to know about it pronto. To keep from losing out, have your trusted real estate agent set you up with an email auto-notification based on your unique and specific requirements. With our new Fusion MLS system when a listing agent enters their shiny new listing data, property photos and information into the MLS system and hits the This-New-Listing-Is-Officially-On-The-Market button, within a few heart beats you will receive an instant email alert. It doesn’t matter if the new listing goes live at high noon, midnight or anytime in-between you’ll know about cool, hot new listings that meet your personal criteria before the uninformed and slow-moving tortoise like masses. Now that you know before your
bidding against you home buying competitors everyone else, move swiftly. Stories about hot new listings hitting the market and attracting multiple showings and offers on the first or second day are not exaggerated. Move fast and you’ll be moving in. Congratulations!
We’re seeing more and more off the MLS radar inventory sold via jungle drums, whisper campaigns and real estate agent grape vines. Savvy listing agents prepping a new listing for market and always-on selling agents are exchanging phone calls, texts and emails about upcoming inventory. We’re seeing many properties sell privately before they hit the MLS mass market. Ask your trusted real estate agent to bang a drum, send emails to known top listing agents, put a ear to the ground, make some phone calls and see if they can learn about fresh soon-to-be-on-the-market listings before everyone else.
Expectations and Behaviors: Put yourself in the shoes of a seller. In a seller’s market what are they seeing,thinking and feeling?
- Prices are rising.
- Construction cranes everywhere.
- Daily news about how awesome the Greater Houston Area real estate market and economy is.
- Rich corporations are moving their offices, headquarters and high paid employees to town – think Exxon/Mobil, Anadarko, etc.
- Inventory is at an all time low and homes are selling faster than ever.
Sellers are smiling, knowing it’s a seller driven market. Understanding the mindset of the seller and their listing agent will help you and your agent successfully navigate your home buying experience, eliminate lost opportunity, buy at a fair price and move into your new home with a smile too.
When you find your dream home don’t drag your feet, hem or haw. Hustle pays off. In this market a tortoise won’t win the race. Be prepared to pull the trigger, be a
Buffet bullet and submit your offer.
If held for a long period of time and purchased at low rates, Buffett says houses are even better than stocks. He advises buyers to take out a 30-year mortgage and refinance if rates go down. – Warren Buffet
It won’t happen every time, but anticipate competing offers and consider
adjusting sweetening (without souring your satisfaction) your offer accordingly. Values are risings, don’t wring your hands over a few thousand dollars. Today’s insanely low mortgage rates make affordability a once in a life time gift. For every thousand dollars you borrow on a thirty year mortgage your monthly payment will rise a measly five bucks or so. That means if you and the seller are ten thousand dollars apart from an agreed up price, you’re really not talking about ten thousand dollars, because you’re financing your purchase you’re really talking about fifty bucks more a month. Come on now. What’s the big deal. If it’s the property for you and yours, make your move. Remember, odds are, if it’s an attractive enough property for you to be interested, no doubt other qualified buyers will be attracted too. Those other people are your competition! Don’t let them drink your milkshake. You will begin to build equity by owning now, not looking and waiting for deals and steals – they don’t exist.
Don’t be embarrassed, too prideful or penny wise and pound foolish to offer full price. In this market we are seeing offers submitted at or slightly above list price. These committed buyers usually walk away with prize. When you find what you like, it’s fine to end the home search tour and put in an immediate offer. If you
like it love it, buy own it. Plus, keep in the mind the mortgage company will complete a property value appraisal. If the property doesn’t appraise for the contract price you can always bail or renegotiate.
Terms Of Purchase: To hone an edge and stand out in the sellers eyes consider sweetening the terms of your offer.
- Larger down-payment.
- Bigger earnest money deposit.
- Short trigger point deadlines and exit clauses for things like the Option Period and days for financing approval.
- Provide the seller with written mortgage pre-approval from your lender.
- Flexible closing date.
- Possible seller lease back.
- A personal letter to the seller sharing a little bit about yourself and your situation sometimes helps the seller choose one bidding buyers offer over the other.
Inspections and Repairs: After your contract is executed you’ll have an opportunity to have the property inspected. Because you’re not buying a brand new home it’s common to turn up a long or short list of items that aren’t perfect. Understand
accept that in a seller’s market a seller is less inclined to pay for the repair of cosmetic items. Have your agent get a bid on the inspection items you’d like to have completed. If the seller won’t pay for them don’t get angry or take your eyes off your prize, your real estate agent will have the names and numbers of reputable repair and home improvement people who can get the job done for you fast and affordably. Or if you’re a DIY kinda person, go for it. Don’t lose out because the seller won’t make the property perfect or spend a few hundred dollars in cosmetic type repairs. If you like it, buy it own it.
The bottom line for buyers
Use these tips and you’ll successfully navigate today’s new strong-like-bull seller’s market realities with a smile and success. Good luck, speed and grace.
If we can be helpful – Ken Brand 832-797-1779.