Our newsletter last month focused on helping buyers work their way through the challenge of buying a home in this extremely hot seller’s market. Now we would like to focus our attention on the challenges of selling your home in this same market.
Current Interest Rates
So why would we take a newsletter to focus on selling your home? Selling should be a “piece of cake” right? Well, yes, but there are some significant challenges and serious dangers for sellers in this market, and we would like to share those with you.
Pricing is very important in this market. When pricing in any market, we use recently sold properties to compare with our subject property then we establish a listing price based on our careful evaluation of the features, attributes, and benefits of each. But because buyers now approach their purchase with the understanding that the actual selling price will be above the asking price, we must be super careful when establishing that asking price. Too high and we lose the expected pool of buyers, too low and we risk the ultimate return for the seller.
A pre-inspection is now almost a must-do practice. The pre-inspection report is made available to any requesting agent. This gives their buyer the opportunity to evaluate the inspection to determine if they can safely move forward with writing their offer.
When no pre-inspection has been done by the seller, buyers are forced to do their own inspection or take the chance of purchasing without an inspection. This has the tendency of reducing the pool of buyers which brings in fewer o ers for the seller and may ultimately reduce the final selling price.
Showing chaos has also been a new challenge for all of us as professional agents to work through given the fast-paced market, short selling times, and the showing restrictions under the Covid-19 real estate protocol.
Some homes have drawn so much interest that the “Showing Time” schedule rapidly fills in with agents booking showings of the home. The default showing time slot is only 15 minutes long, but is that ample for a buyer to look at, consider, and finally decide to write an offer? We don’t think so and therefore set 30 minutes as our expected showing time booking. But what happens to the interested buyer who wants to go back for a second look when the time slots are all filled in? Or for that matter, perhaps the showing schedule is so busy that even first-time lookers are not successful. What can we do as agents to overcome some of these challenges? We have solutions, but we do not have the space in this newsletter to review this in detail.
REVIEW ALL OFFERS ON “DATE”
These listing instructions are pretty much commonplace in today’s market, but you and your real estate agent must understand how this may play out for your home, and there are attending challenges.
The seller’s patience can be tested to the extreme in this scenario as you wait for “D-Day.” Do we have any offers coming? Do we have any idea what the offers will look like? Will we arrive at the offer review date and not have any offers?
SHOULD WE ACCEPT AN EARLY OFFER?
This can be very tempting – especially when that “too good to be true” offer comes in. In general, we find that the overall strength of the offers almost always improves when waiting until the offer review date.
WHAT MAKES THE BEST OFFER?
Is it always the highest price? Price seems pre-eminent, but would you like the sale to survive and actually close? There are a lot of considerations to take into account. Has the price on your home escalated to the point that the appraisal may become a significant issue? Is the lender responsive and helpful, do they return telephone calls; do they know what they are doing in this market? Is the amount of earnest money weak for the sale price; does the buyer have enough “skin” in the game to work at making sure this deal closes? These are only a few of the danger areas that we experience.
BUYER’S REMORSE AND SUBSEQUENT WALK-AWAY
Did you know that unless the buyer has waived the right to revoke their offer based on anything found in the Seller’s disclosure (Form 17), that the buyer can revoke their offer any time prior to 3 days after the receipt of that disclosure? Perhaps the buyer just got cold feet after some second thoughts about what they spent for your home, or perhaps they found a home they liked better two days after entering the contract to buy your home!
SOME GENERAL THOUGHTS
We have found that the current seller’s market brings with it a higher level of stress on everybody involved – sellers, buyers, real estate professionals, mortgage lenders, inspectors, and a host of others as well. This is a time when every step of the process must be accomplished with accuracy, faithfulness, honesty, patience, wisdom, and care.
Communication on the part of real estate professionals with all parties is extremely important and can be the grease that keeps everything moving smoothly.
It is our experience that while getting the home sold in the first place may be easier in this market, keeping the home in contract and headed to a successful close may be tougher in this market than it ever has been.