IS IT REALLY A SELLER’S MARKET??
As our market activity continues to move in a positive direction for sellers, I wanted to take this opportunity to bring to your attention some potential pitfalls to be aware of as you may be planning to sell your home.
As a seller, it is true that there are generally more buyers than there are homes for sale, which often results in multiple offers. While sellers may be in the driver’s seat when it comes to price, know that there are many obstacles to overcome throughout the process. As you REALTOR®, my job is to guide you through these issues so that you may come out on top, which to me, means that you come out having made fully educated decisions throughout your negotiations.
- It’s not all about price – I have seen sellers accept a price far exceeding their asking price only to fall out of escrow a short time thereafter. This is common when the market is “hot” as we see buyers “jump in feet first” without analyzing value, condition, etc. Their goal at the bidding stage is to “win.” Once they have secured the contract, many often have second thoughts about having paid too much, or negotiate unrealistically for repairs due to the price they paid (If I pay a premium price, I want a premium product). It is important to have your agent thoroughly vet the buyer’s agent, the buyer’s loan officer, and the buyer’s motivation and experience owning a home in the area (aka: are they coming from a tract development where cast iron plumbing and foundation settling will scare them away?). The bottom line here is this – price talks first, but know who you are dealing with and set up realistic expectations for all parties in order to ensure a smooth process and a win for all!
- Appraisals – As our values continue to rise, appraisals are becoming increasingly difficult. You may agree on a certain price with a buyer, but if they are stretching themselves with price, be aware as a seller that you may need to adjust your price if the appraisal does not come in at value, or move on to another buyer. I always tell my clients whether buyer or seller, “there are three basic potential outcomes if an appraisal does not come in where it needs to be: 1. Buyer asks Seller to reduce price to meet appraised value, 2. Buyer asks Seller to meet in the middle, reducing the price by half the difference, and Buyer will add the other half to their down payment, 3. Seller will not reduce price and buyer still wants to buy, so Buyer adds the deficit of value to their down payment.” Anticipate these discussions as you navigate through the appraisal process.
Although our market is still rather hot, keep in mind that the ultimate goal is for you to have a successful sale, and you always want your buyer to be happy with their home once you deliver the property to them (there’s no telling what a disgruntled buyer will do post closing), so do your best to keep negotiations calm, collected, strategic, and fair for all.
I hope this information is helpful. If you would like to discuss how I can help you navigate through your sale successfully, please give me a call at 619-944-2798!