If you are thinking of buying or selling a house in the near future, you may be stunned at what you discover when you jump in.
The slow market of the past five years has disappeared in desirable communities around the country. It's now a whole new competitive ballgame that one family was surprised to find.
Homes Selling Before Buyers Can Make Offer
Andy and Allison Sathe have finally found a home for themselves and their 2-year-old little girl.
But it was a rough Spring, because other homes they wanted sold before they were able to make an offer.
"Houses that looked appealing, you'd see them on websites and they'd be gone within two or three days, and you'd really have to move quickly," Sathe said.
That's the realty in 2013. Homes that during the "buyers market" of two years ago would have languished for months are now selling in days, if not hours.
Why the Hot Market
Realtor Lori Wellinghoff says there are several reasons, the main one being that there's not enough supply right now for the pent up demand.
"There is not enough inventory to satisfy the universe of capable ready hungry buyers for a property to call their own," said Wellinghoff.
The other reasons are a short supply of brand new homes, with few homes built from 2008 - 2011, and rising mortgage rates, that are forcing many fence-sitters to make a move this summer.
What You Can Do
Wellinghoff has some great tips for getting an edge in this fierce sellers market, something we haven't seen since 2007.
-1. First, she says, you must be preapproved and ready to go.
"You need to be ready to act very quickly, and by ready you need to have your prequalification documentation ready to go on a moment's notice," she said. Sellers will not wait for you to get your finances in order, when they have another offer ready to go."
-2. She says forget low-balling, which was considered normal 2 - 3 years ago. In a hot area you need to offer close to asking price, she said.
If it is your dream home, consider offer asking price right up front, so that you don't get edged out by another buyer.
-3. Don't make special requests such as asking for a roof to be fixed or old carpeting to be replaced. That worked 2 years ago, not now.
-4. If the market is super-competitive in your area, you can't ask the seller to wait for you to sell your old home.
"In days of yore," Wellinghoff said, "you might have said contingent on selling of my existing home. Those type of contingencies will not let you be competitive with other buyers."
-5. Offer a large earnest money deposit: That puts you ahead of other buyers, and shows you are serious.
-6. Finally, Wellinghoff says enlist an experienced Realtor who can find listings before they hit the market. They can often show you a house a day or two before the sign and MLS listing are posted for the world to see.
That's how Andy and Allison got lucky.
"We had this house presented to us before it was even on the market" they said, "so we think it's really important to get a good agent."
With mortgage rates going up, Lori says even more buyers may jump in this year before rates soar higher. So she says make the best offer you can.
Advice for Sellers
Thinking of selling?
It's the best time in five years to sell, but Lori warns that prices are still down 20 percent from their 2007 peaks in many areas.
If you overprice your home, she says, it won't sell, because buyers know an overpriced home when you see it.
Forget about what it was worth six years ago, she says. Price it according to today's market.
That way you don't waste your money.
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