It's about to be a very busy real estate season. Many people are excited to buy their dream home, but it's very important that the buyer starts with contacting a lender.It can be a waste of
Most Common Mistakes In A Sellers Market
FINALLY, after years and years of difficult markets for sellers, we are experiencing a sellers market in Kenosha County.
There are many reasons for this happening now, but the short answer is that there have been several employers that have moved to the area with several more to come, along with a national housing recovery that been largely fueled by a long period of low rates and a market correction that put prices back into reach of many consumers that simply could not afford the same house 10 years ago.
Many people hear this, and REACT to changing market conditions by "throwing" their home out on the market, or suddenly trying to capitalize by "speculating" on the market.
Here are some of the common mistakes made:
BUYERS: Many buyers still not not understand how the shift in market conditions should affect their negotiating strategy and still negotiate as if this is a buyer's market. These mistakes include:
Not being properly qualified to make an offer - Cash buyers MUST be willing and able to prove their ability to buy the property for the offered price before looking at or drafting an offer. This means a bank statement, letter from a personal banker, Verification of Deposit or other document as proof of the ability to close on that cash offer. Financed buyers should not ONLY have a preapproval letter from a reputable lender, but that letter should specifically state that the buyers income, asset credit verification has already been completed and that the only additional needed documents are an accepted offer to purchase, appraisal and title work. Also, buyers should be willing to prove their down payments.
Making "LOWBALL" offers. If a property is presented and marketed properly, and at a fair price, chances are you won't be the only person making an offer this weekend. You have to up your game and be ready to offer your highest and best price upfront. If you are working with a buyer's agent, ask your agent to provide you comparable sales, or a quick market analysis. Decide upfront what your max price is for this property, and offer close to that price on your first offer. Otherwise a seller may not give you a chance with a counter offer, and instead select another offer that was more aggressive to start with.
Too many concessions/contingencies: When writing an offer, find out from you agent what typical contingency items can be cleared or addressed upfront, so that you can write a cleaner offer. For example, if a survey is important to you, find out if there is already an acceptable survey on file, so that you can review and approve it, and you don't have to ask for a survey contingency. The more "outs' you leave yourself in an offer, or the more "hoops" you want a seller to jump through, the more likely they will accept another offer if its cleaner and comparable to your price.
SELLERS: Just because its a "Sellers Market" doesn't mean that sellers are immune to making mistakes or that buyers will pay whatever you want for your home.
PRICE! Remember, part of the reason for the sellers market, is that prices have corrected. Don't expect to ask 2006 "pie in the sky" prices and get your property sold immediately. Even though prices have improved drastically, if you ask too much, you will miss out of those gains by making your listing stale and overpriced. Also, even if you can get an offer for more than the current market, chances are the buyer has a lender, and an appraisal will be needed. Comparable sales are a lagging indicator of value, which means appraised values increase slower than offer prices. Ask your agent to pull comps weekly if your home is on the market to make sure you are still priced properly.
PRESENTATION! In the HGTV world, buyers have much higher expectations than in the past. Staging and good photos are key to starting the listing off properly.
PATIENCE: The ability to close quickly has been affected by many changes. If you sold a house 10 years ago, (or even just 2 years ago) buyers didn't have to wait for the TRID disclosures and other new regulations that have slowed the process. Expect that it will take a minimum of 45 days for even a preapproved buyer to close. If the buyer is promising a closing date sooner, EXPECT AND PLAN for delay so that you don't get caught off guard later. Also, if you have a property PROPERLY priced, you may have the opportunity to have a multiple offer situation. This requires a patient skilled negotiator to net the highest price without losing the buyers.
Of course having a competent and aggressive agent representing you can make all the difference in the world. Choose an agent who isn't afraid to tell you the truth, even if its not what you want to hear.
Ralph is a lifelong resident of Southeastern Wisconsin and an expert in real estate sales, and real estate values in Kenosha, Pleasant Prairie, Somers, Bristol, Salem, Paddock Lake and the surrounding....