As most people are aware, the Puget Sound real estate market is pretty wild right now.
Seattle, Bellevue and King County are experiencing a more challenging market than is Pierce County and the greater Tacoma area, but throughout the region we are seeing prices escalate and a shortage of available homes for sale. There are bidding wars, buyers are waiving the right to conduct home inspections, prices are exceeding appraised values, and many folks feel frustrated or intimidated.
Nevertheless, every day new homes are listed and come on the market, and everyday buyers successfully make offers and get them accepted. Working with a REALTOR to implement a good strategy will help you whether you are a buyer or a seller.
As a seller, especially of a home in a “hot” price range, it can feel exciting and flattering to get lots of showings and even multiple offers. Buyers can fear to lose a home to a higher bidder, and sometimes offer more than a home will appraise for. This can cause a sale to fail, aggravating everyone. Your REALTOR should be able to provide good advice in avoiding the pitfall of accepting a sky-high offer, only to have it collapse due to a low appraisal.
There are options your broker can suggest to a buyers’ broker to make their offer more acceptable. In some cases, a buyer can agree to bring extra down payment funds to make up for a low appraisal. Or an offer which doesn’t require the seller to pay the buyers’ closing costs can keep the purchase price lower, making the appraisal less challenging, and keeping the sellers’ net proceeds higher.
Opinions differ, but some real estate professionals advocate being transparent with buyers’ brokers in a multiple offer situation. Giving your broker permission to disclose some information about other offers, and about your priorities can help guide buyers in making an offer that best meets your needs. Discuss this with your REALTOR and develop a plan.
As a buyer, you need a REALTOR who is advising you immediately of listings which may work for you. Time is of the essence! Strategizing with your broker to ask questions of the listing broker to find out as much as possible about the sellers’ motivation can help make your offer stand out. It’s not always just the price that matters to a seller. For example, they may desire a fast closing, or perhaps a delayed one. Giving them what they want to get what you need is the key to negotiations, and knowledge is power.
Sometimes you can play on the heart strings of a seller. A heartfelt letter explaining why their home is such a great fit for you may tilt the scales in your favor.
With good REALTOR representation, you can do well in this market. Use strategy, and work smart. Good luck!
Ed Tropp, REALTOR®