Tag Archives: multiple offers

If a Home is Priced Properly…

It will still sell quickly. While the average days on market in Seattle for a single-family home in July was 26, my Wallingford listing just sold in 7 days with multiple offers.

As you work with your real estate broker to price your home, it’s important to find the sweet spot – that is, the spot that is likely to bring in the most buyers. The sweet spot means you’re in the market, not on the market.

For more information on selling your home or the real estate market, please call me at 206-790-0081 or email Jamie@JamieFlaxman.com.

Shift in the Market?

We are seeing a shift in the market, but it’s not a cause for alarm. This shift is a balancing. We have reached the point where prices have hit the top and now they’re settling down. A recent article from CityLab.com explains it well:

“Housing prices are cooking. Across the nation, the price of homes is rising faster than the rate of inflation—in some places by a factor of three. That’s true of high-cost cities such as Seattle and San Francisco and lower-cost cities such as Charlotte and Tampa alike. And the overheated market for homes is costing the middle class the American dream.

Nationwide, the price for homes is approaching the zenith seen in 2006, just before the market fell into a foreclosure crisis and the economy sank into the Great Recession. . . 

But there are key differences between the housing peak in 2006 and the housing peak today. This surge in housing prices is not necessarily evidence for a bubble—much less any indication that a bubble is about to burst.

Late in July, the S&P CoreLogic Case–Shiller U.S. National Home Price NSA Index tracked a 6.4 percent annual gain in home prices for May 2018. This index has recorded year-over-year increases of at least 5 percent every month since August 2016—a sign of the strength of the recovery. . . . in Seattle, which saw a year-over-year price increase of 13.6 percent for May, home prices are already well above the 2006 high-water mark.

But since most workers aren’t earning 6 percent raises year after year, eventually this party has to come to an end. (Indeed, for four-fifths of privately employed workers, wages are actually falling.) Housing prices will stabilize or soften because they have nowhere else to go. The prevailing trend is unsustainable. “If something can’t go on forever, sooner or later it will end,” says David Blitzer, managing director for S&P Dow Jones Indices. With mortgage rates and prices rising, sales in both new homes and existing homes are starting to slow. ‘Either buyers have gone for the summer, because it’s too hot to look at housing, or they’re pausing to see what’s going on,’ Blitzer says. ‘If the pause continues, you’ll see sales go down.'”

And this is what we’re now seeing in Seattle. Most homes are not selling in 7 days and significantly above list price right now. I’m seeing a significant increase in price reductions and less multiple offer situations as well.

What does this mean for you? If you’re a buyer, this is all good news. It means you may be able to get into the market without a bidding war and having to look at homes significantly below your price point.

If you’re a seller, it’s not a time to panic. This shift is actually creating a healthier market. You probably will get less for your home than if you listed 6 months ago. But you probably will still have significant profits if you sell as prices are at record highs. We still have a significant shortage of housing so even with the increased inventory, demand still outweighs supply. Inventory levels are still under 2 months which means it’s a seller’s market – a balanced market would be 4-6 months, and a buyer’s market would be greater than 6 months.

As I’ve said often, there’s no crystal ball in real estate. In my predictions for 2018, I said price increases would slow down. In fact, year over year prices are still up about 11%. I also predicted interest rates would hit 5% before year-end; we have already hit this number which is reducing buying power for buyers.

If you’re thinking of buying, this is the time to get pre-approved and start your buying process. If you’re a seller, I’d be moving quickly to get your home on the market while prices are still at the peak. Please call me at 206-790-0081 or email me at Jamie@JamieFlaxman.com for a complimentary market analysis for your home.

How Many Offers Does it Take?!

It’s a tough market out there for buyers. With demand for housing seriously outweighing supply, buyers are competing on most listings, and losing out on many.

The most offers I’ve had to write for a client was 2 years ago, when it took 8. I’ve heard of buyers who have submitted in the double digits.

Right now I have 2 sets of buyers who are on the offer roller coaster. One set has submitted 4. The other 2 (and we’re waiting to hear on the 2nd). It’s frustrating. You find a house you love and want to buy, but end up competing with 26 other offers (yes, last week buyer set 1 was one of 27 offers). You move on, but then you go through it again. What to do? Here are some tips I offer to buyers:

  • Know the numbers. You know what your maximum you can spend is. But also know the market numbers. If homes are selling 10-20% above list price, you should be looking at properties listed 10-20% below your maximum.
  • Have your financing lined up, and make sure your lender has taken you all the way through underwriting (except for a property address). Have a local lender who is available on the weekends.
  • Look at homes that have been on the market for more than 10 days. These are less likely to receive multiple offers. In this case, you might be able to look at homes at or slightly above your maximum as you might be able to get an offer accepted below list price.
  • Think about what you can compromise on. Could you go a few miles farther out? Is having a garage more important than getting a house? Don’t restrict yourself to fenced yards, you could put a fence in yourself.

For more ideas on how to compete or to talk about the real estate market, please call/text me at 206-790-0081 or email me.

How Do I Compete in this Crazy Real Estate Market

If you’re a buyer in our crazy, hot market, you may be wondering, how do I compete? While most properties are receiving multiple offers and bidding wars, it is very possible to be successful in our market.

I have an 8-step process for helping my buyers be successful. These steps begin with being pre-approved for a mortgage and knowing the maximum amount you can afford. I have a list of wonderful lenders who can help you with your pre-approval.

My 8-steps include recommendations on pricing and how to make your offer stronger. If you’d like to learn more about the 8-steps, please contact me.

Another option in our market is to look for homes that have been on the market for more than 2 weeks. It’s very possible these homes have been overpriced, so even if the list price is higher than your max budget, you may be able to negotiate to a price in your range.

Let’s talk about your home buying needs. Phone/text 206-790-0081 or email me.

Seller Strategies for Evaluating Multiple Offers

If you are considering a sale in our market right now, depending on the price point, area, and property amenities, you may receive multiple offers for your property. Although price will likely be at the top of your list of variables to measure, there are a number of other items that may be included in the offer that should be evaluated:

  • Price – Although this is the primary concern for most sellers, there is more at stake than just money. Read on!
  • Escalation Clause – Savvy buyers may include an escalation clause which allows the price to inflate to a certain amount dependent on what other buyers have offered.
  • Earnest Money – Buyers include earnest money which represents the buyer’s ability to complete the transaction as outlined in the contract. In the event the buyer defaults, the seller would be able to keep this money. In our market, it is not unusual for a buyer to put up between x% and x% of the home price in earnest money.
  • Sale of Buyer’s Current Home – Do the buyers have to sell their home before buying yours? When there are other buyers and sellers in the mix and your home sale can be affected by their financial soundness and ability to close, this needs to be taken into consideration.
  • Financial Position – Sellers are picky about the price of the home and how the home is paid for. There are a number of things to consider in this category such a how much of a down payment the buyers are coming up with or if they are paying cash, what financial institution is the financing through, and what type of loan are they getting.
  • Appraisal – If the buyer is getting a loan from a bank, the bank will require an appraisal done on the property to make sure their financial interest is protected. But what happens if the appraisal comes in lower than the purchase price and the bank won’t loan the full amount expected? How submitted offers address this situation need to be evaluated.
  • Inspection and Requested Repairs – Did the buyers get a pre-inspection or do they plan on having one after the offer is accepted? What will happen if the buyer finds items that they want to negotiate to be repaired? Different buyers have different comfort levels when it comes to these issues and this is a top variable to evaluate and determine the parameters that are most advantageous for you.
  • Additional Items – Do the buyers want the chandelier in the dining room? How do you feel about that?
  • Closing Date – How does your preferred closing date concur with theirs?
  • Rent Back – If you need more time to move out after closing and get your next home transaction in order, will the buyer allow for a period of time to rent back the home for a few weeks up to a month or two?

For more information, give me a call/text at (206) 790-0081 or email me.

Pre-Inspections

In the hot Seattle market we’ve had the past few years, many sellers are giving buyers the option of conducting a pre-inspection before submitting an offer on their home. If you’re a seller, this may sound like a great option. When the offers come in, you know that it will be unlikely that the agreed upon sales price will be reduced later because of issues found in the home.

But it’s really not that simple, AND buyers hate doing pre-inpsections. A typical inspection costs around $500. And add a sewer scope in for another $225. In a multiple offer market, buyers may have to submit offers on many homes before winning out on one. With pre-inspections, it’s not just the $725 inspection on the house you’re buying, it’s a $725 inspection on each offer. I know of buyers who have spent thousands of dollars just on pre-inspections.

For a seller, you might receive an offer that states something like: “We were going to submit our offer for $600,000 but then we discovered the roof has serious defects and has to be replaced, so now we’re only submitting it for $590,000.” As a seller, you are now legally obligated to disclose this material fact to all other buyers submitting offers, and this may decrease those offers or turn away potential buyers. (I had this happen recently where my seller learned of a plumbing issue from a pre-inspection and had to disclose it, resulting in a lower sales price.)

The other downside of pre-inspections for sellers is there is risk of damage from the pre-inspections. I know of a house that had 18 pre-inspections. And if there are multiple sewer scopes, there is risk of the scope damaging a line.

So what are the options for sellers. Put your home on the market, review the offers, and let the buyer you choose then conduct an inspection. Another option is to do your own inspection before listing the home, disclose the issues, and put it on the market. The seller should still encourage the buyer to do their own investigation of the property and not rely solely on what is provided by the seller.

Questions, comments, give me a call at 206-790-0081 or an email.