A decade ago, selling a house came with a special set of challenges. The inventory of homes on the market kept growing and prices went down.
We were in a strong buyer’s market and had to think of creative ways to get home hunters to even look at our listings.
Prior to that — and before the housing market crash — we were in a seller’s market that we thought would never end.
Interest rates were significantly higher than they are now, but people kept buying and prices kept rising. The sign would go up while the fax machine started printing out offers.
Fast forward to 2017, and we again find ourselves in a strong seller’s market. It seems like every month we hit a new record for the fewest number of homes for sale, and when a home does come on the market, it already has an offer on it.
Managing client expectations — and heartbreak
I’ve had clients who were planning on buying this year decide to sell and then rent because they felt as though they didn’t have enough choices.
I have clients who will not put their homes on the market because they have no place to move. They are part of a growing pipeline of future business.
This week, I wrote an offer for the purchase of a home that I think is coming on the market. I have an interested buyer — I am sure we’re not the only ones eyeing it — and it may be sold before my buyer’s offer can be presented.
There are so few homes on the market in my area, it’s almost scary. Yet when I look at the numbers, I can see that homes are being sold every day.
Locally, the number of home sales and new listings are both up from a year ago but trending down, with high demand and inventories at record lows. Prices are still rising.
Providing perspective and crafting a game plan
As I remind my clients, not all homes are sold the first day that they hit the market. The average days on market is around 50.
The median is 21, which means half of homes stay on the market for more than 21 days. Despite what it may feel like, not all homes are getting offers on day one or during that pre-listing period (which limits their exposure to the general public before they’re officially for sale).
I have some strategies I share with homebuyers to help them get the kind of property they want.
One way to find a bargain is to make an offer on an overpriced house that has been on the market for a month or more. The offer should be less than the asking price, but a fair price that reflects the value of the property.
Some buyers win in multiple offer situations by bidding on homes listed for less than they had planned on spending. That gives them room to make a higher bid, assuming the home is worth it.
Adapting to changing markets
We didn’t have these conversation in 2010. We talked about short sales and waiting for the bank to respond to offers.
Homebuyers are not ideal clients right now, but there are plenty of them.
Back during the buyer’s market, it seemed like we were always looking for buyers. This year, my ideal client is a seller who doesn’t need to buy a home in my area, or another home at all. Clients like that are investors who bought low and are ready to sell high and the reluctant landlords who lost their equity during the crash.
In the current market, you have know the numbers and stay on top of subtle shifts and changes. It’s also crucial to educate sellers about the advantages of working with a Realtor — homeowners may believe that finding a buyer is the same as selling the house, and we all know it isn’t.
Finding the buyer isn’t hard; it’s merely the first step in a process.
Getting the best terms and closing the deal is never quite as simple as buyers and sellers think it will be. Time and again, something happens (or doesn’t happen) that had been anticipated as a sure thing one way or another.
Real estate agents know how to solve problems and how to get the sale closed. Experience teaches us what to look for in a purchase agreement and how to advise our clients.
Then, now and looking to the future
So what does this seller’s market look like?
Marketing ideas designed to make homes sell quickly are working exceptionally well right now — even when we don’t use them — imagine that! They won’t work as well during the next buyer’s market.
For sale by owners (FSBOs) are popping up here and there and remain as always, a great source of business.
Some vendors and consultants and others in the industry don’t really get this market, and by the time they do, it will shift again.
When housing prices were dropping like a rock, I don’t recall seeing any “coming soon” signs in front of homes.
Instead, there were move-in premiums and offers from the sellers to pay closing costs and make repairs.
So navigate the current market carefully. Know that we’ve always been up against challenges as real estate agents, just not always the same ones.
We must continually adapt to factors outside our control, and never get too comfortable.
Teresa Boardman is a Realtor and broker/owner of Boardman Realty in St. Paul. She is also the founder of StPaulRealEstateBlog.com.
