You often see in the MLS remarks the now-standard comments like “this won’t last” or “reviewing all offers on Monday”; whose intention is to make you think it’s a hot buy. But now that virtually every listing says those same things, you have to look deeper.
The true hot buys require immediate action, but only about 1 out of 10 listings fall into that category – if that many.
About half of the remainder are obvious, like this one which listed today:
It’s the same floor plan and a few doors down from the REO Craptacular we just saw list for $939,000, so their $1.375 list price makes for an easy choice.
The other half are tougher to figure.
For a house to command a frenzy premium, it needs to have most or all of the following things going for it:
- Quality location.
- Excellent condition – visually attractive.
- Big kitchen, great room, and/or good master suite.
- Newer features – high ceilings, big windows for light, etc.
- Decent-sized private yard.
- Great school district.
- Excellent presentation by agent.
Once you see a house that fits into most of these, how do you know if you need to jump on it? Other signs to consider:
A. Is the listing agent actively pushing the product, or on the 3-P program? (Put the sign in the yard, Put the lockbox on, and Pray)
B. Does the listing agent’s recent listing history indicate they are sharp on pricing? Does their average DOM make you reach for your checkbook?
Of the 338 listings I’ve sold on the MLS, my average is 40 days on market. Twenty-six of those were in the last 12 months, and their average is 23 days on market. If the agent of your target listing has better numbers than that, you should not wait around.
C. Does the presentation impress you? Will it cause other buyers to come running with suitcases of money? If not, your patience is more likely to be rewarded. The listings with quality photos/video that are complimented with open houses offer maximum convenience to buyers, and are the ones that sell early.
D. When at the house, are there business cards of other agents scattered around? Have you heard of any of those agents?
If the house just listed and there are 10+ cards, then it might be hotly competitive but make sure it wasn’t a ‘refreshed’ old listing, or on broker preview that day. If there aren’t any cards, maybe there isn’t any competition, and you can let it ride until the initial urgency is gone.
Last week I showed a house while it was on broker preview. I got there a few minutes before it began, and what I saw told me plenty. The listing agent showed up for the first two minutes, and once the goof assistant arrived, the LA left. The house was priced at retail-plus, and had a 1960s floor plan and mostly-original kitchen. I knew that most buyers would pass on that quickly, and the lime-green house across the street clinched it – no need to rush into anything here.
We know that the vast majority of houses that sell for top dollar are those that sell early in their listing period – usually in the first 5-10 days.
As a homebuyer, time is your best friend. We know that if a house isn’t sold after the first two weeks, the showings dry up until the sellers start lowering the price.
So if you can be patient for 2-4 weeks before offering, you should catch the sellers, and listing agent, in a more-negotiable mood.