Are the bidding wars over?

Let’s face it, it’s fun to have a home listing during a seller’s market. When inventory is tight, even less-than-perfect homes invite the frantic bidding wars seen over the past few years. But as the economy slows down and interest rates increase, sellers are wondering if the bidding wars are over, and what that means for them.

First of all, bidding wars have occurred in every kind of real estate market. Well-positioned homes have always garnered attention and offers. What’s different in a seller’s market is that buyers are so desperate to find a home, that multiple offers seem to be normal on every listing. As the pace slows down, sellers need to adjust their expectations and avoid costly mistakes.

Seller Mistakes to Avoid in a “Normal” Market

· Bad Curb Appeal – Curb Appeal is once again important to making a good impression.

· Delayed Response – Don’t wait to respond to a buyer’s offer because you hope to have a bidding war.

· Unreasonable Demands – Buyers have choices now, be reasonable with the counter and contingencies. · Highest Offer – Don’t assume that the highest offer is the best offer.

· Priced too Low or too High – Price the home correctly. Don’t play games with the price.

Finally, be patient. In a typical market, an average home is on the market 30-45 days. This is a change from the past few years, but a healthy real estate market benefits all parties.

Don't Get Represented by a “Yes-Agent”!

We all know the type. The person who just says “yes” to anything, never challenging or questioning an opinion or strategy. These people-pleasers agree with anything suggested; while they may be nice friends, in real estate a yes-man or yes-woman can actually cost you money. Often a lot of money. No one likes to leave money on the table, but having an agent who doesn’t challenge unrealistic expectations is not serving the client. So, how can you spot these yes-agents? These yes-agents can take many forms. On the seller side, they could be the agent that lists a home at an unrealistic price. Well-priced homes are selling quickly, but that does not mean that a seller can add 10% or more to recent sales and expect to sell the home. Over-pricing a home can cost precious time as potential buyers forgo viewing the property in favor of well-priced options. As the home lingers on the market, the seller must eventually lower their price to market value. Buyers often assume the seller is desperate to sell and offer lower prices than they might have at the beginning of the listing. Buyers represented by a yes-agent could find themselves writing unrealistic offers as well. There is danger in writing a low-ball offer just to “see if it sticks.” The yes agent might be willing to send over the offer, but the seller is just as likely to assume the buyer isn’t serious and move to more realistic offers. The yes-agent just cost the buyer the home. Spotting a yes-agent, and avoiding them, can save real estate clients time and money, and ensure they achieve their real estate goals.

Getting Outbid? Strategies to Make Your Offer Stand Out and Get Accepted

Summer is traditionally a busy time for buyers and sellers. This year has been no exception—and with lower interest rates, many homebuyers are finding the competitive environment challenging. With multiple buyers competing for properties, even terrific offers are often being outbid. Fortunately, there are some things you can do to make your offer more attractive to the sellers and increase the chances of getting the property.

• Have Full Pre-Approval – A step beyond pre-qualification, a pre-approval involves submitting your full application to underwriting. Your lender will collect all your financial data and submit for review. This is stronger than a pre-qualification; a pre-approval requires the buyer to provide the proof of their ability to qualify for the loan.

• Increase the Earnest Money – Earnest money is the deposit held in escrow. While the contract will dictate how monies are disbursed in the event of a cancellation, increasing the amount offered can show the seller you’re serious.

• Add an Escalation Clause – In a bidding war, it can be difficult to know what to offer because you want to outbid the competition without going too high. An escalation clause is one way to automatically outbid the others. The clause typically offers an amount—$1,000 for example—higher than any verifiable offer up to a specific amount. This can ensure yours is the highest offer.

• Pay any Appraisal Shortage – When offering more than asking price, sellers become concerned about the appraisal coming in too low. If you are willing to pay over market value, include the amount of shortage you are willing to pay.

• Remove Inspection Contingency – This option can be tricky, but if you are planning a large remodel or are willing to tackle any defects found, then you can make your offer stronger by accepting the home as-is.

In this fast-moving, competitive real estate market, it’s important to make your offer stand out from the crowd. These strategies are great ways to demonstrate to the sellers that you’re serious about buying their home, increasing the chance of having your offer accepted.