Selling Season Is Here
The real estate selling season commences once the Super Bowl holiday weekend is over. What can you expect, and how can you prepare yourself for buying and selling this year?
Low inventory – With no foreclosures and very few short-sales around NSDCC, the inventory of homes for sale is dependent on the elective seller. Apparently, only a few of them want or need to sell, and there are enough buyers that the good one go flying off the market quickly, leaving few available.
Sellers – Expect a buyer stampede during the first week, and that the showings will drop off dramatically after 7-10 days. It is smart to sell during that peak urgency in the first week, when buyers anticipate a bidding war. Once the market dies down, you either need some neighbors to list higher than you to make you look better, or you chase the market down as neighbors learn from your price.
Buyers – Expect bidding wars on every decent house as long as mortgage rates are in the threes. Know that there are no rules, and make sure you prepare winning strategies with your agent to compensate.
Today’s Detached-Home Inventory on MLS:
San Diego County: 3,017 with average LP = $403/sf
NSDCC: 667 with an average list price of $716/sf
(On January 14th, the count was 649 at $722/sf)
Prices – Expect prices to reach near-peak levels in the coming months in many parts of NSDCC.
Sellers – Prices might go higher later, and they might not. One you decide that you’ll sell for what you can get today, then select an agent who has demonstrated an ability to conduct a bidding war.
Buyers – Add a little mustard to your offer price – everyone else is.
Quick Decisions – The quality properties will get offers the first day.
Sellers – Don’t think that you are under-priced and are giving it away. It is purely a function of the buyer frustration, and wanting to end their search – so expect the early stampede, and pick a solid offer.
Buyers – Prepare in advance to make quick decisions. Know the market by tracking the recent sales, employ the auto-notification system so you get pinged immediately with new listings, have pre-qual letters and copies of bank statements ready, and expect to see a new listing the first day it is on the market.
Know the Contract – Quick decisions are still legally binding.
Sellers – Once you have a written agreement to sell your house, you can’t back out. Only the buyers have escape clauses.
Buyers – Know your escape clauses.
It is a Retail Market – There aren’t going to be many, if any elective sellers willing to sell for less than retail.
Sellers – Pick an agent with a good reputation. The buyers and buyer-agents will feel more comfortable making strong offers with listing agents they know and trust. If they don’t know the listing agent, you can bet that they will be checking their sales history and googling their name – you should do the same. In particular, check their blog.
Buyers – Below-market sales prices might be achieved by low-balling old listings. They haven’t seen many visitors lately, and you might get lucky and catch them on the day that they need to do something.
Beware of Ivory-Tower Prognostications
Sellers – Listen to your agent, and the action in your neighborhood. Put your home on the market right after a couple of high sales close nearby.
Buyers – It is smart to track the overall market, but qualify any opinion by how close the author is to the street action. For example, David Stockman is calling Housing Bubble 2.0 because he doesn’t see any first-timers. If he were on the street, he’d see that first-timers with low down payments are getting smoked by cash offers, and then by those with big down payments.
Bidding Wars – There are several ways to handle them, and the listing agent has control……or not.
Sellers – The best way to achieve top dollar is to create an open-bidding, auction-like process. Because that is in its infancy and participants may not be comfortable enough, the next best way is to solicit each buyer’s highest-and-best offer, to ensure that they all have a chance to bid higher.
Buyers – You may not get a chance to submit a second time, so once you know that there are multiple offers, go ahead and submit your highest-and-best offer and hope the seller might sign early. If you have already submitted your highest-and-best price in your mind, and are asked to go higher, consider going a little higher because it is cheap money.