“The market is crazy!” Everyone keeps saying that, but what does that mean exactly?
The real estate market that we’re currently in is new for most of us. Even in my 23 years of running a real estate business, I’ve never experienced anything like this! The “crazy”, from my point of view, is the tide-change from what used to be smooth sailing just before the pandemic, to the now choppy and unfamiliar waters. What that means to any real estate consumer is, now more than ever, consumers need an experienced REALTOR® to help navigate the crazy seas of real estate!
So, what’s so different? That’s an excellent (and a very loaded) question! I’ll try to explain…
Remember that other tidal wave that disrupted real estate back in 2007-2008? The market crashed and one of the results was a massive tsunami of foreclosures that flooded the real estate market. As a result, when homeowners needed or wanted to sell their homes, they had no choice but to compete with the HUNDREDS of foreclosures in and around their neighborhood. Foreclosures, at the time, were being sold as-is (in need of much repair) and for well below market value. So when trying to determine a list price, those foreclosures were dropping the housing values dramatically. Another domino effect was that in order for sellers to attract homebuyers, not only did they have to drop their list prices to stand out from the crowd of foreclosures but they also offered to pay a buyer’s closing costs. It was a BUYER’S MARKET (buyers had control and leverage). Even the builders jumped on that wagon and attracted home buyers with incredible incentives like price reductions, closing cost assistance, and free builder upgrades. Builders even went as far as to offer big bonuses to REALTORS® in order for us to help sell their products.
Between 2009 up to just before the pandemic, the rough seas of the real estate market were calming down. We were smooth sailing again. For homebuyers, for example, I was able to negotiate sales prices below list prices. I was able to negotiate to have sellers pay closing costs, title policies, and home warranties. If a seller needed to stay in the home for a short period of time after closing, buyers were able to charge “rent” for the temporary lease-back.
For sellers, on the other hand, I was able to rely on SOLD data from the past three to six months to determine a Fair Market Value (FMV). Properties that sold and closed within the past six months offered a reliable range of comparable pricing for similar properties (without a lot of foreclosures, like before). Understanding the data and the sales trends, we were able to help sellers get the best price without taking big risks of losing a deal because an appraisal fell short.
Now, fast forward to today – post COVID-19 Pandemic:
In short, everything that we were used to (the smooth sailing) turned upside down! And the best way people can express the change is by calling it, “CRAZY!”
“Crazy” is the “new normal” for the real estate market and for now it looks like this…
It’s a SELLER’S MARKET – SELLERS GONE WILD! Gone are the days of sellers having to “attract” buyers. Even foreclosures (the few we have to contend with) are earning top dollar. Today, we currently have more buyers than active listings. And what happens when you have one baited fishing line and hundreds of hungry fish? A FEEDING FRENZY! Now, when a new listing hits the market, it’s like dropping that fishing line off the boat right into shark-infested waters! You guessed it – it’s a bidding war. There’s no time to “test the market” or to offer under list price, “just to see what happens.” If you try that, what’s going to happen is that your offer will be pushed to the bottom of the 20 other (more serious) offers the seller already received.
In today’s market, if a potential buyer really wants to win the deal, they need to offer their “best and final offer” upfront. Why? Because sellers don’t have to counter every offer they receive. Listing agents will help sellers weed out the good, the bad, and the ugly offers and they’ll negotiate with the best ONE first. Chances are, that buyer will get the deal done.
How can we sweeten a BUYER’S offer to stand out from the crowd? Now THAT’S the question to be asking.
Call me or text me at 210-378-5987 right now, and I’ll tell you exactly what we can do for YOU! The strategy isn’t a secret, the strategy is customized to your needs.
WHAT CAN I DO FOR YOU TODAY?
Val J Aranda, REALTOR® & Certified eXp University Mentor
A Wonderful Life Real Estate Group
Brokered by eXp Realty, LLC