By Matthew Trudel
Both buyers and sellers have plenty of things to deal with in
a market that has houses selling for $25,000 to $50,000 over the asking
price. I even know of a couple of houses
that went for almost $100,000 over asking price. How do buyers and sellers
navigate such a crazy market? Both
should start with finding an experienced real estate broker to work with to
assist them in achieving their real estate goals.
How do you go about selecting the correct real estate agent for the job?
Here are a few things to consider when making that decision
and going through the selection process:
Almost everyone knows a handful of realtors. The number of new agents over the last several years has increased significantly, even throughout the pandemic. Experience and knowledge are some key things to look for when selecting a realtor to work with. Try to find a real estate agent who knows the area in which you are looking to buy or sell. Again, I would like to bring up experience as a key factor.
There are so many things that come up in any transaction from
problems in inspections, negotiations, legal documentation and/or financing
problems. Having the experience to
negotiate and solve those problems can be the difference of a successful
transaction or one that falls apart. So,
find a real estate broker who you are comfortable working with and get the
process started.
Sellers are mostly concerned about the value of their home and
the price they should list their home
for sale. This is where it gets a little
tricky and knowing the area and what the pulse of the market is in that area
are crucial. In the old days we would
list homes a little over what we thought they were worth or would likely sell
for. Then wait for an offer to come in
or slowly drop the price over time.
That doesn’t work anymore in this market and is not a good
strategy to get you the most money for your home. Pricing it accurately and getting the most
potential buyers at your home in the first few days is the correct
strategy. This creates more demand, more
competition and produces higher offers generally well over the asking
price.
The number of potential buyers in relation to the listing
price correlates very similar to a pyramid.
The higher the listing price the fewer the number of potential buyers
will come see your house. Raise the
price a little more and that number of potential buyers shrinks a little
more.
Eventually, as you consider raising the listing price, you would run out of buyers altogether. This is what we call pricing yourself out of the market. Buyers in today’s market are much too savvy and knowledgeable with all the technology out there with regard to home valuation. However, when there is a lot of competition and interest in a home, the knowledge they have is used to try to outbid each other creating multiple offers well above the asking price.
Buyers right now do not seem to mind that the interest rates
have ticked up a little to around 5 percent or slightly over that. Inventory is still low even with all the new
construction going on. Buyers need to be
prepared and ready to go as soon as a property hits the market.
Your real estate broker should be working closely with you and
your mortgage broker or lender, so everyone is prepared to get the offer in
when you find right home. It is likely going
to be a competition between several buyers and yourself and having an
experienced broker who has been through the process for years can give you the
edge over other competing offers.
The highest offer is not always the best offer, so there is
lot more to negotiating an offer than just increasing the price. I have written several articles over the
years about different strategies that can be successful in competitive markets
like this one. Sometimes it can be as
simple as writing a short letter to the seller explaining a little about
yourself and why you like their home and having your realtor present that
letter along with the offer. There are a
lot of other things I like to incorporate into putting together my clients’ offers
and all of that research has to happen quickly with time being of the
essence.
If you would like to learn more, feel free to give me a call
to set up a confidential meeting. <
This article was written by Matthew Trudel, Broker
and Owner of Five Star Realty, Windham. Call 207-939-6971.
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