Just yesterday I performed a market update for an upcoming selling client and in their zip code housing inventory was at a three year low. In their entire zip code there is currently only 0.3 months of housing supply, which means that every active home for sale in their area will go under contract in the next week and a half.
That is a supernova-hot seller’s market.
Of course, they were thrilled to hear the news. This most likely means that they will receive multiple offers on their home and it very well may sell for several percent over list price.
But now let’s look at the flip side of this scenario. If you are a buyer looking for a home in the same zip code I mentioned earlier, you have a challenge ahead of you — especially if making quick decisions is not your forte.
A supernova-hot seller’s market require a lot from a buyer. You have to be very well educated about market conditions. You also have to understand that your “must have” list has to be much shorter than it can be in a more balanced market. In addition, you must understand that the list price is often just a starting point, not a destination. Your win, in most cases, is simply to be the winning offer. It is not to get a great “deal.” Your great deal is the fact that mortgage interest rates or just a little over 3% on a 30-year mortgage. That is an unbelievable deal, long term.
A buyer in this market also has to consider that if they love a home, there are most likely several other buyers who also love the home and are willing to compete for it. This means that there is no “sleeping on it.” By the time that you wake up the next morning, another buyer will most likely be under contract on the home that you love.
A good question to ask yourself in this situation is, “If I were to get the call that this home is under contract with another buyer, would I be sick to my stomach or just say oh well?” If you would be sick, then you most likely need to present an offer at your first opportunity. If the answer is oh well, then don’t bother. You must have a competitor’s mindset with the goal to win in today’s market.
One last suggestion to consider is when writing an offer in a competitive market, consider that your first offer may very well be your only chance to make an offer. I work with sellers exclusively while other members of our team assists our buyer clients. Time and time again I see selling clients attracted to the buyer who throws everything in (including the kitchen sink) on their initial offer. This includes their highest and best price, possibly as-is, and a closing date of the seller’s choosing. Oftentimes like energy attracts like energy, meaning- a highly motivated buyer with a strong offer will attract a highly motivated seller.
If you would like to speak to one of our expert buyer specialists, please contact us today to create a custom home-buying plan for you!
This Sponsored Column is written by Chad Taylor of the Taylor-Made Team and Keller Williams Realty Key Partners, LLC. The Taylor-Made Team consistently performs in the top 3% of Realtors in the Heartland MLS. Please submit follow-up questions in the comments section or via email. You can find out more about the Taylor-Made Team on its website. And always feel free to call at 913-825-7540.