Having been a full-time real estate agent in Northern Virginia since 2005, I have experienced more than the intense seller’s market of 2020-2022. Seller market conditions had been present in 2019, but the market was not as difficult to navigate as it became in 2020 and 2021 for buyers. Escalation clauses became very commonplace in the last two years and right now, they are still present in the market. Unfortunately, the market conditions, while still favoring sellers, is chilling out a bit. Competition is still present, but more limited and buyer actions more deliberate. What concerns me is the buyer and buyer agent perception of how escalation clauses actually work.
When you write an offer with an escalation clause, you are writing an offer that can speak in your absence. I have written about the appropriate use of escalation clauses before which focuses on situations that would call for them. This post is not to rehash that, but to talk about how shifting market conditions are chaning how sellers react to escalation clauses.
The risk to a buyer in writing an escalation clause is that they are showing the seller exactly how much they are willing to pay for a property. In the absence of other offers in hand, a seller is well within their rights to remove that escalation addendum and counter at a higher price, possibly to the max of the escalation addendum. Buyers and their agents tend to think that is not fair, but I am here to tell you that fair has nothing to do with it. When you have shown your upper limit, you need to be prepared for the consequences.
Just in the past month I have represented two sellers who had escalation clauses in offers. Neither had anything above list price when the offer with the escalation addendum arrived. One had multiple list price offers, the other no offers, but lots of traffic. Both buyers were stunned when the seller countered removing the escalation addendum and countering their offer. Cries of, “You can’t do that,” and “That’s not fair,” were made. Well, the seller can and who said life was fair. Mind you, in the ultimate act of fair negotiations, both sellers went midway between the max escalation and list price with their counters. Yet, the buyers were left feeling taken advantage of.
These buyers didn’t seem to understand, that in a market with not enough inventory, sellers still have the advantage. What sense does it make to say you would pay twenty thousand over list, but only if someone else was willing to pay a little less? Do you want the house? Do you want to lock down the deal before a better offer comes in? Especially on properties that you know will get other offers, it is a dangerous game to say no to a counter at a price you would pay otherwise. And if a buyer in this situation has not waived appraisal, there is no way they are going to be forced to pay above appraised value. From even a buyer’s agent perspective, it is hard to see rejecting a counter offer at a price a buyer would be willing to pay.
There is risk to a seller in removing an escalation addendum. Once a buyer’s offer is countered, the first offer that buyer made is no longer valid. It has been altered. This is very important for buyers to understand because their offer with a escalation, once countered by a seller, is not automatically going to best another within a certain range.
Understanding that bold statement above, let’s say Buyer A made an offer at list price, escalating above other offers in increments of two-thousand dollars to a max of twenty-thousand above list. Seller counters Buyer A removing escalation addendum with a sales price of ten-thousand above list price. What is wise for Buyer A to do? If Buyer A was worried that other offers may get higher than that since their original escalation was twenty-thousand above, they would be wise to take the counter. However, if Buyer A wants to counter the seller one escalation above list from their original offer at two-thousand above list, meanwhile Buyer B enters the scene at five thousand above list, Buyer B is now the highest offer. If the seller takes Buyer B, Buyer A will be kicking themselves that while they wasted time trying to get a few thousand lower, they could have locked in a deal still well below their max escalation.
When representing buyers I always make sure they understand the worst that could happen when including an escalation clause in their offer is that they get countered to their max escalation. And common sense says that if they were willing to pay that to begin with had other buyers been present with offers on the table, why wouldn’t they want it in a counter offer?
As far as I can tell from the listing side, buyers seem to think escalation addendums are a way of playing a real estate version of The Price is Right Showcase Showdown. They can best another buyer and be minimally out of pocket. Sellers are under no obligation to take the highest offer. In fact, sellers often times will take the buyer that appeared the most serious from the beginning, even if it costs them one-thousand dollars. An example would be Buyer A bringing in an offer at twenty-thousand above list with no escalation and Buyer B bringing in offer at list, escalating five-hundred above another to a max of twenty-thousand five-hundred above list. Buyer A swung for the fences with their offer. They didn’t need to know another buyer wanted it for just as much. That speaks volumes to a seller.
If you are serious about a home and you are worried enough about other buyers wanting it to include an escalation, try reframing a possible counter from a seller as a positive thing. You may just lose the house you wanted because your perception is that there are no other buyers interested. Better yet, write the max offer you are willing to make without an escalation and get sellers to act vs. waiting a day or two for an offer to escalate you. Buyers are still facing markets with not enough homes to go around.
How Many Days Does it Take to Sell in Spring 2022?
With the two percent increase in mortgage interest rates since the beginning of the year, you may have heard whispers of our Bristow and real estate market changing. Certainly, interest rates increasing have pinched buyers even more when rising home prices were already making it tough to afford a home. However, to declare that the market has measurably shifted from a seller’s market would be wrong.
In late April, dealing with the same interest rates, I placed a single family home in Bristow on the market. It was hottly contested and had multiple offers in a matter of four days. This past weekend, after having been on the market for just over one week, 14443 Macon Grove Lane had three offers at the same time. Multiple offers did happen, but not quickly. It was a rolling situation that left one of the four offers pulling out and moving on. What’s different between these two homes?
The single family home at 9477 Cromarty Court was owner occupied and updated to the nines. It also had a sought after water view. The downside of this property was the compact size of the rooms on the main level. However, the sellers had left no detail unnoticed. When it was time to the hit the market, the professional marketing drove up buyer enthusiasm and the coziness of the main level was not an issue.
While the condo at 14443 Macon Grove did hit the market a week later, it was not owner occupied. Tenants in a home never have a vested interest in a successful outcome. They are losing their rental home. In this case, the landlord realized this was an issue. She was by far, the most savvy landlord I have dealt with in my seventeen years of selling homes. She cleaned up the property herself. She decluttered the property before showings herself. She even put the tenants up in a hotel for the weekend while showings were happening. The only problem was, the weekend we really wanted to list the house was unavailable to us as the tenants had plans. That meant a hasty rush to market.
A professional photo shoot with great pictures that truly represented what buyers would see in the straightened and cleaned home, happened the day before it was to go active. I am here to tell, buyers and buyer agents do not make appointments until they see listing photos. Unfortunately, the photos didn’t hit the MLS until Saturday morning of our two day showing free-for-all. Showings picked up after the photos had been in a few hours, but the real activity wanted to happen Sunday through Friday. The tenants were unable to accommodate showing requests except for three hours in the evening, and one evening was taken off the table completely. (sigh) Even with showing restrictions and showing condition dwindling after the return of the tenants, the condo in Gainesville got multiple offers. It just took eight days to get there.
We are still in seller market conditions in Bristow and Gainesville. Of course, what matters most is what has mattered all along–how your home is prepared and marketed. An unprepared home is not going to create buyer enthusiasm. And even if it does, if buyers can’t get in to see it, that is a problem. If buyers are seeing poor listing photos, you are sunk.
Proper listing preparation and professional marketing get sellers to the top of the market no matter what their condition. And when there are issues you can’t work around, having a skilled negotiator representing you as a seller is critical. These two properties are great examples of how the market is influenced by condition and marketing. Stay tuned for their final sold prices. Until then, if you want to investigate the 2022 sale of your Bristow or Gainesville home, get in touch with me for a no obligation market analysis.
In late January 2022, I listed a Parks at Piedmont South condo for $315,000 at 14530 Kylewood Lane. At the time, $315,000 was on the high end for what a condo there would get in a sold price. Imagine how delighted my sellers were to get $335,000 when they sold. That leap up $20,000 over list price in sold price got the attention of the seller of my latest seller at 14443 Macon Grove Lane.
With tenants in place through June 30th, the owners had to make a quick determination. Do they list before the lease is up, for fear that rising interest rates may hinder a future sale, or list with tenants in place? Knowing that no two scenarios in real estate are the same, I advised the owner that if they listed with the tenants in place, it would behoove them to somehow get the tenants to buy into the process. Tenants in a listing have nothing to gain and their residence to lose. How do you get them to help with showings and make the house neat?
After deciding to move forward with listing sooner, the owners took the listing preparation on themselves as any other seller would have to do in the sale of an owner occupied home. They went in and took care of patching and painting, decluttering and cleaning. Best of all, they graciously paid for the tenants to have a weekend in a hotel during the first weekend of showings. Buyers and their agents are able to see the home this opening weekend from 10am-8pm with ease.
This three bedroom condo is the same floor plan as 14530 Kylewood. The floor plan is simply reversed and with different finishes. The floors on the entry and main level are hardwood, with the exception of the kitchen. There you find ceramic tile floors and granite counters.
The open main level floor plan, located on the second floor of this Linden model condo is the top feature of this home.
The second best feature is the owner’s suite on the third floor. It is an expansive space, large enough for any size bedroom set. Attached owner’s bathroom offers double sinks, oversized soaking tub, separate shower and water closet.
The fourth level is where a loft living area separates the second and third bedrooms from each other. It also offers a second full bathroom.
With a one car attached garage and convenient Gainesville location, close to many shops, restaurants and major commuter routes, this condo is sure to please. If a buyer closes on this sale before June 30th, the monthly rent of $1,930 will be pro-rated or paid in full to the buyer, as they will become the temporary landlord. If a buyer does not to deal with tenants for even a month, the settlement would have to occur in early July.
Community amenities in Parks at Piedmont include a community pool, playgrounds, basketball courts and walking trails. Condo fees include snow removal, trash removal, road maintenance, exterior building maintenance and master insurance policy for the structure. Owners need only a condo insurance policy to cover everything from the walls in.
If you are interested in this home, don’t hesitate to reach out.
Selling in a Seller’s Market is Not a Guarantee of Best Terms
As limited housing supply continues to meet unfettered buyer demand, more and more sellers have been overly confident in their place in the market. Believe it or not, not all homes sell in a seller’s market. They will if they are priced right and/or in good condition. Market forces are always at work, which means buyers still compare what is offered to what they have recently seen and what they expect to see in the near future.
It is not uncommon for a buyer to walk away from a perfectly pleasing, over priced home in a seller’s market because they fear it will get bid up above that list price. Preparing market reports regularly for the neighborhoods of Braemar, Dominion Valley and Regency I see sellers getting below list price and selling in weeks, not days. Some even have to give seller subsidy. Why? It’s a seller’s market, right?
When buyer demand is high and inventory is low we are indeed in a seller’s market. That does not mean that sellers can ignore listing preparation, hire low skill listing agents who know nothing of professional marketing and expect to get the top of the market. Consider a top athlete who is a free agent. They will get picked up, but how much money they make depends on the strength of their agent. Agency is all about advocacy. Sellers who hire listing agents are not unlike athletes or actors who have an advocate on their side advising them and helping them negotiate. Talent agents know how to best present their client’s gifts to increase demand to max out the money made.
Bringing it back to real estate and the intense buyer demand our seller’s market is facing, it is fair to say to any seller who asks if they need to complete listing preparation to sell, “No.” If the price is right for the projects left to buyers who are faced with having to pay their own closing costs, down payment and now take on projects in a home, there is no doubt the home will sell. The question is, how much is being left on the table by leaving the preparation undone? More than the cost of the preparation.
Same goes for sight unseen offers. Can a seller get a great offer before anyone has set foot in their home? Sure. If they let showings roll a few days, chances are the offers would get better and better. Why? The pressure to accept sight unseen offers is usually from buyers who know they will not be competitive in a multiple offer situation. And if they will not be competitive in a multiple offer situation, why on earth would a seller who only gets one chance at maximizing their profit not wait to see more than one offer? From my own comps, I recently watched as a seller left approximately $30,000 on the table by not being photographed or going active with their listing agent. Very few sellers I know are willing to walk away from that kind of profit.
Having a strong advocate who knows the current market conditions because they are active in them every day is so important. Let’s go back to our talent agent analogy. Do you think hiring a relative who just became a talent agent is what big name athletes and movie stars do? No. Their paychecks are dependent on outstanding representation. They sign with agents with proven track records of success and outstanding reputations. Why don’t sellers when it comes to listing? Part of the problem is that they conflate the cost of a listing agent with the bottom line they will net. They never consider that a more experienced agent will more than pay for themselves in the preparation advice, professional marketing and skilled negotiation. The other part of the problem is they think anyone with a license will do. This job has very minimal standards. Agents who are exceeding industry standards are the ones breaking records with list prices.
When it is time to list your home, even if it is in a seller’s market, pay attention to the marketing done on behalf of the other listings in this seller’s market. Are they offering staging advice and other preparation? Are they hiring a professional to take listing photos? Are they pushing sight unseen offers? There is never an easy button when it comes to getting the absolute max the market will bear. However, if a seller is okay with leaving tens of thousands on the table, any agent will do. If they want every dollar they can get, are willing to do the work and put up with a few days of showings, they will be over the moon with the results when they hire an experienced broker like me to help them through the process.
A seller’s market can be exceptionally profitable, but should not be treated as a lottery. Choosing the path with the best odds of getting top of the market will make a seller successful. That path starts with hiring the right advocate.
Is Listing Preparation Necessary in a Seller’s Market?
Sitting across from a seller this morning who had started the process of packing, pausing only to sign our listing agreement, there was a lot of discussion over what is necessary to do prior to hitting the market. Very few homes that I walk into are neutral enough, de-cluttered enough and exuding enough mass appeal to be what I, as a real estate professional, would consider market ready, but it does happen.
As a Top Producing Agent in the Bristow/Gainesville area, the sellers I meet want the maximum amount of money they get out of their homes for the minimal amount of effort. Moving is hard enough. Prepping a home for a red hot market seems ridiculous to them. After all, the market is so hot that some sellers are accepting sight unseen offers. They want to know why I am advising them to paint, de-clutter, put in new carpet, etc when a buyer is likely to write a sight unseen offer. The answer is usually in the realm of, “Because you want the same or better that the seller down the street got, and their home was move-in ready.”
Market value is determined by being open to the market. Yes, buyers actually seeing the inside of your home in person. (I know. What a pain, right?) Time and again, sale after sale as sellers and I go over comps, I point out how much more this home made after a few days on the market, being presented move-in ready and professionally presented vs. that home that listed as Coming Soon and took a sight unseen offer from a buyer that didn’t even see photos of the home. A seller that popped up in our comps today sold their home sight unseen. I know the inside of the home because I have been in it. To say the seller left money on the table by taking a sight unseen offer is an understatement. Try thirty-thousand dollars or so is my guess.
Earlier in the week, two of my Coming Soon listings were getting calls from buyer agents begging for a chance to submit an offer sight unseen and have my sellers decide right then and there. Why is that? They know their buyers won’t be competitive when the listing hit the open market. Why on earth would I advise my sellers to take a sight unseen offer that I know can be bested on the open market when they only get one chance to sell the most valuable asset they have? The situations are few and far between where that would make sense. Trying to sell before losing a home to foreclosure would be one of them. Losing out on a home they are under contract to buy because their home sale contingency is about to expire. Minimizing the exposure of a bedridden relative to an overwhelming amount of buyers would be another. Anything else that would may tempt someone to walk away from thirty-thousand dollars would be worthy of investigating opportunities they may not have considered. Boarding pets. Spending the weekend in a hotel. You only get to liquidate your home once.
The same argument goes for listing preparation. Buyer enthusiasm with those exuberant multiple offers doesn’t come from a home that hasn’t been de-cluttered, neutralized and spiffed up for buyers. Sure, an unprepared home may get multiple offers, but the offers will be substantially higher when a seller has put effort into making the home move-in ready. The market comps show it time and again. Is skipping the work worth the money that would be lost?
A little effort goes a long way in this market. Painting the home a neutral color is a great way to put a fresh clean face on the interior of a home. Sometimes the outside might need some fresh paint on the doors, shutters and trim. And maybe a power washing. First impressions are powerful. Tidying up and depersonalizing allow buyers to see themselves living there, which increases their enthusiasm for a home, which increases the price seen in offers.
So when a seller asks me if preparation is necessary, the answer is always, “No, but are you willing to walk away from five to ten percent more in final sold price?” The home sale we saw today that left thirty thousand on the table may have thought differently if her agent had said, “I think you can sell for thirty thousand more if we hit the market for a weekend. What do you think?” Put a price tag on the dreaded event and suddenly it doesn’t seem so bad.
Bringing my first listing of 2022 to the market on January 24th, I knew things were going to be busy. My seller had received a pre-market offer on 14530 Kylewood from a buyer that was well above list price. That was enticing, but in the end, they wisely elected to see what the market would bear if that was an offer someone made without even seeing the home. Boy did the doors get blown off on this one.
Three full days on the market, plus the pre-market offer, left the seller with a total of fifteen offers. Fifteen offers! All of them were above list price. Some were even higher than what the seller ended up accepting. Why would a seller take a lower offer? Allow me to explain.
This four level Parks at Piedmont condo was listed at $315,000. The highest most recent sales were $320,000 and $330,000. The higher of the two had a floor plan where the main level with the kitchen was the entry level. Ours was one where the main level was the second level. Might not be as attractive. Plus the higher priced recent sale had upgraded flooring on the main level, more so than what my seller’s unit had to offer.
The highest offers we had were at $350,000. However, not one of them gave up the appraisal contingency. The best one offered a low appraisal guarantee of only $3,000. That’s not much considering the most likely appraised value would land between $320,000 and $330,000. Talking it over, we made a call to an agent with a listing under contract. Their appraisal had been lower than $330,000. Hmm. The path to which offer to choose became very clear. The seller chose the offer at $335,000 with no appraisal contingency and no inspection contingencies. They knew they would get the sales price. There would be no low appraisal consequence.
This sale now becomes a comparable for Parks at Piedmont South, rising values a tad higher. Maybe the next well prepared, professionally marketed condo will sell even higher. In this frenzied market with very little for buyers to choose from, it is nearly a given. Ready to sell yours? Get in touch for a no obligation market analysis.
On January 21st, I listed 14530 Kylewood Drive for $315,000. Before we hit the market we received a very serious offer from a buyer who was desperate to be in the Gainesville area in an affordable home. Having come off of the second half of 2021, where things had not be crazed, but still favoring sellers, I wondered if it may be the best offer the sellers got. Heck, based on a look at the comps when signing the listing in late December, it was likely to be the only offer. My seller wanted to work something out with the buyer, who incidentally had a home sale contingency. However, when that buyer panicked about the amount over list he had written and didn’t sign my seller’s counter that only shortened time frames, I advised my seller to withdraw his counter offer. Thank goodness he heeded my advice.
Turns out that a condo with fees at just under $500/month, got a total of fifteen offers.
Were any of them just at list price? Not a single one. Every offer was above list price. And surprisingly, buyers willing to waive inspections, appraisals or offer a low appraisal guarantee were back in full force. What a difference a week makes.
If you are a buyer in the western suburbs of Northern Virginia, get yourself an agent that is actively engaged in the market. A full-time professional who notices quickly when the pace or conditions shift. Looking over the fifteen offers I saw submitted, I realized how poorly some of these buyers were being represented. Not my circus. Not my monkeys.
In other news my buyer-clients, who wrote their first offer in a similar price point in Warrenton over the weekend, got their offer accepted. You don’t get winning advice from agents who are barely engaged in the market.
If you need a buyer’s agent, give me a call. If you want the best results and expert evaluation of multiple offers, get in touch with me. This is what I do every day. I make it my job to know the market so I can best represent YOU.
Looking for affordable three bedroom properties in Gainesville? You have come to the right place. Welcome to 14530 Kylewood Way in the Parks at Piedmont South Condos. A four level condo with three bedrooms and two and a half bathrooms and one car garage for only $315,000. Let me tell you all about it.
For starters, it is located in the only phase of the Parks at Piedmont South Condos that is HUD approved. That may not sound like anything meaningful to you until I share this next bit with you. For a condo to qualify under FHA or VA financing regulations, the condo meet certain approval guidelines. This one does. So unlike two-thirds of the condos in Parks at Piedmont South, literally any type of loan can be used to finance it. That makes it in high demand before I even tell you anything about the condo itself.
Every condo in the Parks at Piedmont South is an end unit. However, this is about as end a location as you can get. It is the last condo on the street before you get to the townhouses. That means it sides to a nice grassy common area and also offers a longer driveway than most, with the ability to accomodate two mid-size cars without breaching the concrete apron.
Inside you will be greeted by laminate hardwood flooring. The first floor is the “landing zone” with a powder room, and closet. The powder room boasts a utility style, stainless steel sink in the vanity. It serves dual duty, being right next to the garage.
Head up to the second level, which I call the main level. This is where you find the kitchen overlooking the living room and dining area. You will enjoy plenty of Corian counters, more laminate hardwood flooring, stainless steel appliances and a gas fireplace.
Third floor is carpeted and is where you find the owner’s suite. An expansive room with walk-in closet with custom built-in shevling and a luxury bathroom with dual sinks, soaking tub, separate shower and water closet. Don’t walk past the hidden gems on the third floor landing. A laundry area with full size stacked, front load wasther and dryer, shelving and a tuckaway folding station. And the full size hall mirror hides an ironing board nook. Just slide it over and you will see the organizational ingenuity of the owner at work.
The fourth floor, also carpeted, is home to a loft area off of which bedrooms two and three and the second full bathroom are located. Forget an ensuite bathroom. This entire floor is perfect for the family member(s) that want their own living space in the loft.
There will be an open house on Sunday, January 23 (2022) from 1pm-3pm. Come by and see it for yourself.
Frequently I meet with home sellers who do not wish to be nickeled and dimed over repairs when they are under contract to sell. They will express their desire to sell “as-is” during our listing appointment. There are some points that sellers need to understand about “as-is.”
Selling as-is immediately devalues a home in the eyes of a buyer.
The connotation of as-is to a buyer is one that there are numerous and expensive problems with a home. If there weren’t, why would a seller let you know up front they are selling as-is? Surely, they must be covering up a condition issue. Buyers will picture the home above when a seller is really trying to tell them, “I don’t want to be bothered fixing toilet flappers. I’m too busy.” Talk about demolishing an ant hill with an atom bomb, this is a great example of blowing the intention out of proportion.
Selling as-is is not a substitute for disclosing known issues with a home.
Sellers in Viriginia are tasked with disclosing material defects when selling their home. Latent material defects are the ones that some sellers may think an as-is disclosure is sufficient to disclose. It is not. If there is known mold, it must be disclosed. If there are high radon levels, it must be disclosed. If the seller knows the air conditioning doesn’t work, and wants to list in the winter as-is, that is a problem. And if a buyer voided a contract, presented a seller with an inspection report revealing problems, the seller can’t turn around and ignore the report and slap an as-is label on the home for future buyers and call it a day. Material defects, if not fixed, must be disclosed.
All home sales that happen using the Residential Sales Contract created by the Northen Virginia Association of REALTORS® are actually sold as-is.
There is a Property Maintenance and Condition paragraph in this document that states that that home is being sold in substantially the same condition as of, and a time frame of date of home inspection, date of offer, or some other filled in date, is selected. Furthermore, there are no required repairs in this contract with the exception of smoke detectors being installed and working per the laws and regulations of Virginia and, if a termite inspection is required in the contract, sellers must remediate and fix any damage noted by the pest inspector. (I’ve been selling homes since 2005 and have had no needed repairs due to termite damage, but plenty needing treatment to kill the wood destroying insects. Treatment is not expensive and can often be negotiated down with the pest company.
My favorite as-is date is date of the home inspection. It gives a written record of the home on the date of the inspection that can be used for reference if there is a walk through issue. Sellers are not obligated to do any repairs just because a buyer is having an inspection. If the buyer agreed to move forward with no repairs and complain at walk through that the faucet in the kitchen is leaking, and the inspection report reveals it to be the same at the time of the inspection, it is in substantially the same condition as the date of the home inspection.
Selling as-is is really more of a point of warning, rather than a disclosure, for buyers purchasing from estates or banks that foreclosed on a home. These entities are exempt from the Virginia Residential Property Disclosure Act and, having never lived in the property, are not expected to know material defects with the home. The same point of warning, however, does not exempt a seller who has resided in the property from making disclosures.
When sellers who were vehement about selling as-is hear these points, they understand that a blanket refusal from the outset to do nothing to remedy problems in the home, no matter how small, is going to result in less money in their pockets. Buyer enthusiasm is what makes buyers excited to bid above list price and get involved in multiple offer situations. Starting from an as-is point, buyer enthusiasm is not going to exist. Buyer skepticism is going to reign the day.
Some aggravation is worth the money you get in the sales price to be open to repair requests and judge them on a case by case basis.
New Year’s Eve 2021 and what is this Bristow/Gainesville Real Estate Agent doing? Starting her yearend market reports and blogging. What better topic to post about on my real estate blog than my predictions for the 2022 real estate market. This prediction is not for the country, nor the entire Commonwealth of Virginia. Instead, it is for the areas with which I am most familiar that are outlined on the chalkboard to the right of this post. Those I am most familiar with are Western Prince William County, which includes Bristow, Gainesville and Haymarket.
The real estate market in the first half of 2021 was more hectic and buyer frantic than it had been throughout all of 2020. Buyers were facing multiple offer situations, having to waive all contingencies and offer well above list price to have a chance at being chosen. The second half of 2021 is where things started to calm down. That’s not to say that the market went from a seller’s market to a buyer’s market. Not at all. It was still a seller’s market, but not as intense. My favorite way to explain the change in the latter half of 2021 was a weather analogy. If it were 120° outside early in the day, but later was 108°, you could say it was cooler than it had been, but 108° would still be considered hot.
The second half of 2021, while still presenting a shortage of inventory, compared to buyers in the marketplace, saw less frenzy on behalf of the buyers. Home inspections became a common request again, which was a relief to me having a few buyers actively looking. Marketing times began to creep up and seller subsidy (closing cost help) started to be seen here and there. All of this started about the time the sellers decided in late June/early July to take advantage of the seller’s market. Meanwhile, buyers who had lost out on summer vacations in 2020, were busying themselves with travel and fun. That meant putting house hunting on hold for a bit. The fall didn’t see much of a correction when they returned, rested and relaxed. The buyer frenzy had calmed, but it was still a seller’s market.
The New Year is jumping off from where we left 2021. Home prices are still high and climbing, but the rate of increase is slowing down. It’s far less likely to see a home list a at a reasonable price and see it bid up 7-10% higher. List price or a little higher is what sellers seem to be getting now. Sellers are still unlikely to have to give any closing cost help, but are much more likely to see home inspection contingencies.
No matter the market, my job remains the same–getting my sellers the maximum bottom line they can out of their largest asset. That starts with buyer enthusiasm and maintaining it throughout the process. For buyers it means making sure they find a home that meets their needs and are as protected as they can be throughout the process. Referring to the best lenders, home inspectors and title companies are just the start.
If a home sale or purchase in on your radar for 2022, let’s chat. It is never too early to start talking over the process and getting ready in advance.