The Return of Home Bidding Wars?
How many offers have you recently made and have been outbidded on a property? Or better yet, outbid by cash investors? Has the market seen improvement amidst opposing news articles suggesting more short sales are flooding the market? Guess what, home bidding wars are back! According to the National Association of Realtors in the last 4 years, NJ has seen a 24% increase in home sales. Remarkably to the buyer’s favor, 30 year mortgage rates in the 3.35% and 15 year mortgage rates hovering under 2.75%, now is the time for first time home buyers, 2nd time (trade up) buyers and investors to get in on the lower prices. However, some sellers are finding themselves courting several offers and under a 90 day time period. Does that mean every single home will have multiple offers? Certainly not, but if the home is priced right, marketed properly and showcases well then yes receiving multiple offers is very credible. So what does that mean for buyers and sellers?
BUYERS
1. Believe your Realtor–yes, if you hired them to work for you then yes believe us when we tell you the home is priced GREAT and is a GREAT opportunity. Your realtor has previewed hundreds of homes at varied price ranges and home condition so when we say GO for it. Then believe us–it’s a GREAT home!
2. Get pre-approved before you house hunt–Often times, buyers will aimlessly house hunt with out getting prior pre-approval and/or budget accordingly. Getting pre-approved lets you house hunt with confidence and saves you and your realtor time. If you know you’re comfortable with a specific monthly mortgage payment and your lender has blessed the loan–then looking at homes OVER your pre-approval amount in hopes of negotiating for 5-10% lower is wishful thinking. Most homes are priced for sale and are garnering multiple offers.
3. Be Patient–When you househunt, you must be patient even if it takes you 3 years. I have had a few past clients that took 2-3 years to find a home (rare to take that long) but it happens. Remember, you want to find the right home but aware that you’re buying a home and not the furnishings so be open minded to what you see.
SELLERS
1. Present your home clutter free and “move in condition”– With clutter buyers simply can’t visualize themselves living there. Lighten up the home and host a garage sale or donate generously!
2. Don’t be greedy–Pining for multiple offers and holding out for too long before you accept an offer can be a surefire way of turning prospective buyers off. Remember, buyers have the right to change
their mind so please think carefully before you get too greedy on prices.
3. Be realistic with prices–although home sales are brisk, let’s not get carried away and think home prices have rebounded to the pre real estate market crash. Comparing today’s market to the real estate boom is a recipe for bad pricing. Bad pricing equals no showings. No showings equals no buyer!
For both parties, this is an exciting time for a home seller, because home bidding wars are back but remember be fair and patient whether your house hunting or selling!
photo credit: L.A. Filming Location Expert via photopin cc
