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Once a Seller is Under Contract to Sell…

Once a Seller is Under Contract to Sell…

Ever wonder what would happen if you were under contract to sell your home, but you changed your mind and wanted to stay put? Unfortunately, it does occasionally happen that sellers will be under contract with a buyer and have a change of heart. Does a seller have any outs in the Residential Sales Contract used in Northern Virginia? That’s a question every seller should ask of every listing agent they interview.

The contract used in our area, written by the Northern Virginia Association of REALTORSĀ®, primarily focuses on the rights buyers have to void (get out without penalty) the deal. Unless a seller has a contract with the “Contingent on the Seller Purchasing Another Home” clause, sellers have no avenue to unilaterally void a contract. And even in the case of the home purchase contingency, if a seller is working with a listing agent that isn’t watching the calendar, the contingency dissolves at the deadline, obligating the seller to sell. A seller definitely wants to know when that home purchase deadline is up.

If a seller does NOT have a home purchase contingency in place and finds their desire to sell has changed, there is little more they can outside of pushing back on any requested home inspection repairs or price reductions due to low appraisal that their buyer requests. The ultimate hope here is that the buyer, in the absence of the seller’s willingness to do anything in the buyer’s favor, would void the contract. Obviously, that is a poor strategy and reliant on the buyer having significant repair requests that would trouble them immensely if not done, or the property having a significantly low appraisal that the buyer can not cover.

In my business, I have never had a seller-client that wanted to halt the sale of their home while under contract. Of course, my sellers are counseled on exactly what they are getting themselves into when accepting an offer on their home. My seller-clients also have in me, someone who can read non-verbal communication very well and will address it out right. If I get the vibe a seller is having second thoughts, I am going to ask about it.

In representing my buyer-clients I have come across situations where sellers are wanting out of their home sale. In particular was a buyer-client of mine who happened to be the seller-client of another agent. Every time we went house hunting, there was remorse that they should not be selling their home. It started before the home was even listed. Naturally, not being my clients on the home sale, all I could do was encourage them to talk to their listing agent.

As time went on and they were under contract, the seller’s remorse became stronger. By that point in time, their buyer was past all of their contingencies and ready to close. What does a seller do then? They either a) ask the buyer kindly to release them from the contract, b) hire an attorney and discuss their options, or c) suck it up and sell their home as much as they hate doing it. Again, all I could do was tell them to talk to their listing agent. They ended up sucking it up and selling their home, which made me very sad for them.

The most recent buyer-client I had that encountered a suddenly reluctant seller happened about ten days before closing. The seller, through their agent, begged to be released them from the contract. In mulling it over, my buyer decided (with other factors at play that had not been discovered) to let the sellers out. The sellers were so relieved that we were able to work out reimbursements for my buyer-client from them to cover out of pocket expeneses incurred for inspections, appraisal and survey.

The bottom line message to sellers here is that if you are listing your home, you should be ready and willing to sell under the terms agreed upon in the sales contract. You can not rely on buyer’s being empathetic and kind enough to let you out of the deal, especially in a low inventory market. Have a back up plan if you can’t find a home you want to purchase next. Start by hiring a listing agent that isn’t invested solely in getting you to closing, but whose business is relational. Agents like that…like me, are going to care more about what is in your best interest and not the pay day at the end of the deal.

Quick Sales are Possible in January

Quick Sales are Possible in January

Common knowledge seems to be that the best time to sell a home is spring. However, that philosophy would mean hitting the market when everyone else does. That increases competition. The one thing that the wild ride that started in 2020 taught us is that not having more buyers than competitors is where the money is made.

This Bristow townhouse at 10158 Pale Rose Loop hit the market on January 13th (2023.) Showing requests were immediate. There was only one other competitor on the market at the time in the neighborhood and a few others in nearby neighborhoods. Nineteen showings and a two hour open house that was like Grand Central Station were proof that when it comes to townhouses in Bristow, it is still a seller’s market.

After two offers on the fifth day on the market, the sellers felt accomplished with their multiple offers. They chose one and were under contract on the sixth day on the market.

Want to create that kind of scenario when you sell? Give me a call and let’s talk about the process of creating buyer enthusiasm.

Just in Time to Close Another Deal in 2022

Just in Time to Close Another Deal in 2022

Selling a home after a death in the family can be difficult. Emotions can run high when the loss is recent or if the property being sold was a family home where the heirs to the estate were raised. In the case of 2519 Belleview Avenue in Alexandria, the estate selling the home had not experienced a recent death. Rather, the owner (mother of five) has passed away in 2018, but it was the home where the heirs were raised.

The executor first mentioned this home to me when I helped her sell another home owned by the estate. That was the year her mother passed away. The family home on Belleview had been vacated by the deceased ten or so years prior to her death and one of her sons was renting it. The sibling named the executor of the estate in the will used her best judgment and let her brother continue to rent the home. The estate was collecting rent and paying to maintain the property, which included having a new water heater, new roof and new furnace installed since 2019. However, annual estate reporting to the county, which was more invasive than a tax return and costly, was becoming too much and the executor ended the lease with her brother.

Touring the home with the executor, it was evident that no cosmetic updating, or general upkeep, had been done to the home. As executor, she wanted to know what selling the home would net as-is versus fixing it up and getting it to market spec, which would be updated and move-in ready. No agent has a crystal ball on what investors will offer, but based on what the dollar figure was to renovate the home, and adding a profit margin for an investor, we had a ball park idea of what the as-is value would be. More importantly, with the cost to renovate and the price to sell renovated as known quantities, we knew what was too little to accept.

With low expectations of what investors with cash would offer on a home that needed its plumbing lines and electrical panel brought current, new sub-flooring on the top and bottom levels and cosmetic updating from top to bottom, we hit the market with one photo and a very detailed description of the property condition. The list price was set at a very optimistic $455,000. Cost to update in hand, the lowest amount that would make sense to accept was $399,000 before taking on updating and selling for the market value of move in ready.

Low and behold, after six offers in only three days, there were two owner occupant offers. One at list price with cash, another above list price with a conventional loan. The highest of the investor offers was $405,000. The executor was delighted to accept a full price cash offer for $455,000 that netted her the same amount as if she had done the updates and sold for the highest probably amount the market would allow. There was no waiting for renovations and worry about what the real estate market would be in five months.

What was really an exercise in finding the highest market value for the home as-is ended up being the best course of action. After choosing the full price cash offer, the executor politely requested that they settle prior to the end of 2022 so the estate would not have to file a 2023 tax return or 2023 estate report. The buyer graciously accommodated.

When you are dealing with an outdated home and unsure of what course of action to take, get in touch with me for your complementary consultation. My connections with contractors that can be paid at closing makes renovating a real possibility for cash strapped sellers. All you need is a quote on highest dollar return renovations and a look at the value of selling as-is vs. selling renovated. The right choice for your situation and your property will become clear when all the information is gathered.

Some Sellers Have a Hard Time Letting Go

Some Sellers Have a Hard Time Letting Go

Listing a home for sale involves a lot of preparation. When I go into a seller’s home, it is not unusual to be met with some resistance to suggested listing preparation tasks like de-cluttering, re-organizing, painting, etc. My best advice is that, in addition to putting your home in the best light for the pool of potential buyers in the market, de-personalizing a home also begins the process of letting go. When a seller is too attached to a home, it can be difficult to feel they have ever made enough money or found a grateful enough buyer.

Recently, in representing a buyer in their first Virginia home purchase, I crossed paths with a seller who really wanted to dictate inspections and quotes on behalf of my buyer. At issue was an unfinished project. A guest house was nearly complete, but needed water run to it for a bathroom and kitchen sink. At the time of writing the offer, this seller gave a verbal amount she had received from a contractor. My buyer noted that and then scheduled her home inspection. Interestingly, the seller nearly called off my buyer’s home inspection because it was inconvenient for her. Let me say, having been down this road with many of my own seller-clients, there is no convenient time to have inspections. The idea of an inspector in the home of the most chilled out seller I have ever had still fills their gut with anxiety. Breathe and let the inspection(s) happen.

The inspection brought about more questions about the unfinished project. The seller, who had presented a binder full of permits, invoices and warranty booklets in a three ring binder, seemed uninterested in acting on the request for written estimates and scope of work that had been obtained. When she received nothing my buyer, still in her home inspection time frame, contacted a Class A contractor in the area and made an appointment to get an estimate for the unfinished tasks. The seller refused to allow that appointment that would have taken sixty minutes or so. Furthermore, the seller dictated who COULD come by and give quotes to HER as the current owner. “No you don’t want a Class A contractor, you want a plumber. I will schedule some to talk to me.” It was irritating, to say the least that the seller would double up on quotes and not allow my buyer to have one contractor come by.

All of this control over who, what, when, where and how that the seller exerted nearly cost her my ready, willing and able buyer. The emotional push back hit a nerve and my buyer, a keenly self-aware person, took some down time before responding to bullying tactics by the seller. The seller’s’ actions were doing the exact opposite of building trust and were sprouting seeds of suspicion. Why weren’t there written estimates in this organized binder about the home? Why wouldn’t the seller allow her to do her own due diligence with her own contractors?

The lesson for any would be seller out there is to realize when you are selling a home, you don’t have control over how your buyer will want to move forward in finishing projects or changing the property. The more you insert yourself in their process, the higher the odds are you will push that buyer away. You are listing your home for a reason. Fear is a natural feeling when a buyer has a home inspection. Will they still like the house? Will they ask for outrageous amounts of repair work? Rather than attempting to control the buyer as they process the information gathered, nothing speaks as confidently to the buyer as being quiet and allowing them to figure out their own way forward. No amount of exerting control over the flow of inspectors and contractors is going to make a buyer MORE comfortable.

Why Are So Many Sellers Lowering Their List Prices?

Why Are So Many Sellers Lowering Their List Prices?

Summer 2022 saw a shift in buyer behavior, brought on by sharply increasing mortgage interest rates. We had started the year about 3.5% and by late summer, rates had more than doubled. The frenzy to jump into a multiple offer scrum and make above list price bids with no contingencies all but came to a halt. Multiple offers were still seen on homes that took the time to create buyer enthusiasm, but of the entire summer’s worth of multiple offers I encountered with sellers, no buyer was willing to give up home inspection contingencies or finance and appraisal contingencies. Most buyers felt a strong offer was list price. And seller subsidy was becoming a normal request.

As a full-time real estate agent, the shift in buyer behavior has been palpable. Obviously, I can’t speak to the advice sellers I don’t represent are getting, but my sellers are given an in depth look at what has sold, what they are competing with, any shift in the tides of the market and are given advice about where to price. They are also tracking competing listings and overall market activity to judge whether or not what they are experiencing is on par with competing listings.

Just because buyer behavior has changed with rising mortgage interest rates doesn’t mean buyers suddenly have gobs of homes to choose from. They are able to visit multiple homes and not have to make an immediate decision. Inventory to this point is still not meeting demand, hence we remain in a seller’s market. Unfortunately, to some sellers that had watched their friends, family or neighbors sell during the feeding frenzy that was 2020, 2021 and even early 2022, they equated a seller favored market to that level of frenzy. That leads to three main factors for list price reductions.

PRICING TOO HIGH FROM THE START

From what I can observe in the market, and feather in with what I watched some of my sellers struggle with, sellers were caught off guard and didn’t want to hear that their home wasn’t instantly worth more than the last home in their neighborhood that sold. Therefore, they listed even higher than that most recent sold price. When the market didn’t gobble them up right away, they were stunned. And when some even got list price offers, but included seller subsidy, they rejected them thinking the seller’s market must have more to offer.

Overshooting on list price is a problem a lot of sellers seemed to have faced in the summer and even into the fall. Changing buyer behavior does not mean you still price high and give yourself negotiating room. Price right and get the job done. As days on the market tick by, buyer offers get less and less impressive, assuming that the seller has been over priced. Sellers were forced with lowering list prices to what were more reasonable list prices and would have been appropriate prices at the outset. Some even ended up listing lower than offers they received at the outset. Those were the sellers trapped in the thinking that it was their turn for over list price offers and seller favored terms. Any offer outside of that was insulting.

UNDER IMPROVING A HOME AND RELYING ON MARKET DEMAND

To say a home is under improved for what the sellers are asking is another way of stating it is over priced. In the 2020 and 2021 buyer frenzy, many sellers relied solely on market conditions rather than primping their home for market. The insane level of buyer demand gobbled those homes up with multiple offers, reinforcing to those sellers that they didn’t need to do any preparation, their home would sell regardless. True. Those homes sold. However, there were plenty of examples of sellers who left money on the table with this mindset. Multiple offers always level at market value. Improved homes that peak buyer enthusiasm always see the highest sale prices, even in that buyer frenzy from which we are still experiencing a hangover.

Now that we are in a more typical seller favored market, listing preparation is even more important than it had been. Skipping it and relying on the too few homes for too many buyers to bring top dollar is a lost cause that is resulting in some price reductions were are seeing.

REACTING TO TOO MANY DAYS ON THE MARKET

Days on market has been freaking out a lot of sellers, not to mention their agents. When homes that used to sell in a matter of four or five days were still on the market two and three weeks later, panic set in. Many listing agents working in the market were licensed in years where they have only experienced extreme seller market conditions. Two weeks on the market to them meant it was a buyer’s market. If they represented buyers, they wrote offers reflecting that. If they represented sellers, they were ill prepared to handle negotiating on a seller’s behalf.

Having lived through the housing crash post 2008, I can assure you that two weeks on the market is not a long time. Neither is a month. Try being on the market for six months with no offers. That, my friends is a buyer’s market.

Sellers should be informed of what average days on market for homes like theirs is at the outset of their listing and kept abreast of what is selling before them, or if homes are coming on the market priced below them with more to offer. Many listings in the current seller favored market are going to measured in weeks, not days. When is it time to lower to the price? When other homes like yours at a lower price are being chosen or with more to offer. If nothing is moving, it is the market and you could do yourself a disservice by lowering the price too soon. On the contrary, you don’t want to sit around with a bad price for too many days on market because at some point, buyers and their agents wonder what is wrong with the home. That’s why it is important to know expected marketing times going in after a look at current comps.

Our real estate market is a living, breathing thing that changes. The most important thing a seller can do for themselves is hire a full-time, professional, local agent that can help them through the process.

A Critical Skill for Listing Agents

A Critical Skill for Listing Agents

The Northern Virginia real estate market has been so overly seller favored for long enough that it seems there were two misconceptions in the late summer marketplace. 1) Sellers believe that the frenzied buyer behavior of the past two and a half years is a given and that their home will sell above list price with no contingencies. 2) Buyers and their agents believe that because mortgage interest rates have doubled in less than a year that it is a buyer’s market and are making ridiculously low offers. Obviously, in a market that has shifting buyer behavior and market factors, these two mindsets are diametrically opposed.

When 10303 Annaberg Court hit the market on August 26th (2022,) buyer behavior had already started to change. There was still not enough inventory to meet buyer demand, but media hype of impending doom in the real estate market shifted buyers into a more deliberate mindset. They were no longer impulsive and pouncing on property. The seller had done a fantastic job getting the home ready for market. Updated bathrooms, new carpet, fresh paint, new lighting fixtures and updated landscaping really made this condo in Oakwood Commons shine. Because of the work put into the home, the seller and I agreed to a list price that was on the higher end of the current market at $438,000.

Two buyers threw in offers within the first five days on the market. Neither were motivated enough to write a winning offer, given the level of work that was done to the home. Instead, they parrotted media reports of a crashing market and stood by their closing cost requests, home sale contingencies and every other conceivable contingency. It was frustrating for the seller and the buyers, who could not understand why their offers were not scooped right up. The fact that these buyers were in competition with one another seemed to go right over their heads.

The decision to wait for a buyer that saw the true value in the home was made. Unfortunately, increasing mortgage interest rates scared buyers, priced some out of the market and brought forth three more offers over the course of the next month that were stomach turning, and a price reduction to $429,000. When mortgage interest rates had jumped to six percent and were still going up, it was time to make a deal. The seller saw the stark reality ahead. Unfortunately, the latest interested buyers were throwing around numbers even lower than offers the seller had seen before. It was time to massage a deal with one of the buyers that had previously taken a seller counter and disappeared.

In an inventory restricted market, buyers don’t have as much leverage as they think, despite their feelings to the contrary over mortgage interest rates. Rooting out the buyer’s agent that understood this out of the failed offers was key. That agent and I had conversations about an offer that would work for both of our clients. We floated the terms past our respective clients and they agreed. The deal was struck before mortgage rates increased to seven and a half percent. A win for both buyer and seller.

Listing agents born of the age of multiple offers may never know the art of countering an offer, or massaging a good one out of a not so good one. They both involve thought and creativity. The latter involves soft skills centered on clear, non-confrontational communication. Unfortunately, too many agents speak from a confrontational standpoint. I was raised by a mother that taught me that you catch more flies with honey than you do vinegar.

When the time comes to list your home, there is a lot to consider. Listing preparation and professional marketing drive buyer enthusiasm. Knowing your place in the market, and finding it in a shifting marketplace are essential. Having an agent that can make something from what seemed like nothing can make all the difference. It certainly did to this seller. Let me know when I can help you navigate the sale of your home.

Trading Suburbia for a More Rural Property

Trading Suburbia for a More Rural Property

In late July I was contacted by former clients that had sold a townhouse and moved into a single family home in a Bristow HOA community in 2016. The reason for the move back in 2016 was to get more space for a growing family. The prevailing sentiment in 2022 was that the HOA lifestyle and neighbors pushed in snuggly on smaller lots was not for them. With property values being high, they wanted to investigate selling their existing home and getting something with more separation from neighbors and privacy.

The hardest component of a move-up purchase is timing the sale of the existing home with the purchase of another. When you aren’t quite sure what you want, it means taking time and trying on different types of homes in different locations. While we spent weekends shopping from Front Royal to Bealeton, Catlett and Warrenton their existing home was undergoing listing preparation.

About two weeks before their listing preparation was complete, my clients find the one that was meant to be their home. A twenty-two year old single family home nestled on six and a half wooded acres in Marshall, VA. We crafted their offer on August 24th, a time when the market was beginning to shift. It was a toss up if the seller would be willing to accept a home sale contingency, but they did, along with every available inspection contingency. You don’t buy your first rural property without at least a home inspection, water quality test and septic inspection.

Anxiety about if their existing home would sell was in the back of their minds. Sure enough, it was under contract in record time. While Bristow HOA suburbia may not have been for them, it was still a hot button for many buyers. Of course, taking the time to truly finish the listing preparation and not going off half-cocked combined with my professional marketing was what got that home sale done the right way.

After some negotiation over necesary repairs, the seller agreed to solve some mjaor issues and even a handful of smaller ones. My buyers were able to close knowing they have no immediate concerns in their new home. They were also able to secure a mortgage interest rate that was below market through a special loan program that crossed my desk in the middle of summer.

Are you ready to sell your home and want to try on some possibilities for your next home? Or are you just ready to stop paying your landlord’s mortgage and invest in your own future? Get in touch and let’s talk about what the market has to offer.

Selling a Property With Boundary Issues

Selling a Property With Boundary Issues

Having been a licensed real estate agent since 2005, I can tell you that there is a lesson in every transaction. Lessons that can be passed on to other sellers, buyers or even other real estate agents. The sale that closed today on my listing in Manassas is another great example. At the heart of this transaction, besides a very well kept home with three finished levels and an attached garage in a neighborhood of only two level homes with no garage, is a story about encroaching on land that doesn’t belong to you.

When the sellers contacted me, it was with the future thought of selling. Mr. Seller mentioned that his pool and deck were built barely going over into county land. What was well into that county land was the fence for “their” back yard. The attitude of the seller was, “It’s not going to be a big deal. The county has never said anything.” One year later, as we sat at his kitchen table, I told him it was going to present title issues at a minimum, he dialed up a buddy of his in the title business. Sure enough, his buddy confirmed that the encroachment onto county land was going to cause title insurance problems. The items that encroached on county land would likely be exceptions to the new buyer’s title policy. All that means is that if the future buyer ended up in a dispute with the county over the encroaching structures, the title insurer was not going to cover the cost of any lawsuit or any remedy.

This was the pool and deck that go over into another lot.

From the listing perspective, it was a must disclose situation. Just about every where we could, we disclosed the encroaching structures. Despite having very attractive features for the neighborhood, the disclosure that this property had structures encroaching on county land spooked all but one buyer out of a dozen that had scheduled showings, not to mention the dozen or so that made it through the open house. The offer from that buyer took into account the cost to remove the structures, so despite being priced at an attractive and reasonable $539,900, the offer was below list price and requested closing cost help. The sellers came to grips with the fact, very quickly, that it was either pay now to remove the structures or pay later and made a counter that buyer accepted, upping the price, but it was still below list. Eight days on the market was the final marketing time, not bad considering the circumstances.

The pool and deck that encroached were not the big selling features that the sellers thought they would be once the disclosure that they encroached on property that didn’t belong to them was made. Thank goodness the pool was above ground and not in-ground. An easy removal for a motivated buyer.

Today, as we sat at the closing table, Mr. Seller still scoffed at the idea that the buyer would be removing the structures. “We never had an issue.” There are plenty of people that speed every day and don’t get tickets either, but eventually, if you get caught doing something you shouldn’t be doing, it will cost you. Some folks would rather play it safe.

Today this meticulously maintained home sold for $530,000 and the sellers gave $11,800 in closing cost help. So the lesson is three fold.

Home Owners: Do not knowingly build anything on land that doesn’t belong to you. One lender we discussed the issue with said he had seen local governments institute daily fines starting from the date the encroachment was discovered until the encroachment wass removed.

Buyers: Always have a survey when you purchase property with any type of yard, even a townhouse. It is the only way you will ever know if something is encroaching on your soon to be property or if your property is encroaching on someone else’s land. Further, the only way your title policy will cover you in future boundary disputes is if you have a survey done at the time you buy. Getting one from the seller from when they bought does nothing to protect you. The buyers in this case had a survey.

Agents: If the sellers had not disclosed this information, their buyer would have had the right to void the contract until our title paragraph when they found out. In fact, the buyers had a right to void even though it was disclosed because the title was not one-hundred percent clear and their title policy would have exceptions. Disclosing it was the proper thing to do legally and to avoid disappointment later. The buyers knew what they were getting into.

If you have questions about the home buying or selling process, put my experience to work for you. With real life examples, everything is easier to understand. And my seventeen years and counting of real estate sales experience has many lessons that keep my clients out of trouble.

There is More to Consider Than SOLDS

There is More to Consider Than SOLDS

The fall real estate market in Northern Virginia is changing, just like leaves on our deciduous trees are undergoing a transformation. Many had become used to the frenzied pace of extreme buyer demand that stormed in during 2020 and lasted through 2021, that had sellers setting record high sales prices and collecting multiple offers. Those for whom that was a baseline for the real estate market are left feeling the market is a buyer’s market now that the frenzy has quieted down. That is not at all the case.

While buyers are enjoying the fact that they no longer have to make rushed decisions and waive every contingency, they are left feeling pinched by rising mortgage interest rates that have doubled since the start of 2022. Combined with housing prices that are still trending up, though not on as steep a trajectory, buyers are acting more deliberately. In a lot of cases, they are requesting seller subsidy to help buy down their mortgage interest rate. These factors that have slowed buyers down, has not changed the lack of housing supply to meet buyer demand. We are NOT in a buyer’s market. Believe it or not, the market still favors sellers.

Being in a seller’s market, however, does not mean multiple offers or always selling above list price. Real estate markets are defined by the absorption rate of available homes on the market. We could still have four months of inventory to sell and be considered in seller favored conditions. Our inventory in Northern Virginia, and particularly my primary service area of Bristow/Gainesville/Haymarket has not seen available inventory measured in months for a long time.

The current seller’s market is one where those looking to sell their homes will be advised to consider more than the most recent SOLD listings to figure out a suitable list price. Yes, sold listings are comparables. However, as we begin to build a bit of inventory, home sellers need to also look to a number of other types of listings.

COMING SOON AND ACTIVE

Looking at the available inventory there is to purchase will help a seller to figure out how to price competitively. Just because there are four comparable sold listings at $450,000 doesn’t mean that is the place you should price, or higher, as you would have in 2020 or 2021. Looking at active listings and those coming soon with similar features to your home is critical. If you have three similar competitors on the market priced at $450,000 that have been on the market for a few weeks and aren’t getting chosen, that suggests $450,000 is no longer a reasonable list price. If it were, those home would be under contract. So what competitors have been chosen?

UNDER CONTRACT

Competing listings that have gone under contract were chosen by the marketplace. Those list prices are much more valid, if all things are equal from a value proposition, than solds. Maybe the solds are at $450,000 and the three actives are at $450,000, just sitting there, but there are two under contract that were listed at $430,000. Do you think pricing at $450,000 or $430,000 is a better play? Clearly $450,000 isn’t working for the three sitting on the market.

WITHDRAWN, EXPIRED & CANCELED

As we build inventory, there are also clues in the listings that have been pulled from the market. If there is a withdrawn listing at $460,000 that was on the market for sixty days, that is a big hint that if you were just looking at sold listings, going higher is a no-no. The listings not chosen are as full of valuable information to choose your placement in the market as those active and under contract.

PRICE REDUCTIONS

Suddenly we are seeing price reductions in the market, where they were unheard of in the previous two years, with the exception of sellers who were really taking the frenzied buyer demand for granted and placing exorbitant list prices on their homes. There are sellers in every market that expect their inflated feelings of values to pan out on the market. It can be crushing when they don’t. Buying into an unfounded value as a list price can also be costly in a market undergoing a shift. Wasted time when a market is building inventory means wasted buyer opportunities and inviting more attractively priced competitors. Looking at who is lowering their prices and still lingering on the market is informational as well.

The buyer frenzy has subsided, but market conditions still favor sellers.

The real estate market is still favoring sellers, but that doesn’t mean sellers are seeing ten percent lift above their list prices or are getting buyers willing to waive contingencies. As the insane pace of the previous two years is slowing to a more measured pace, sellers are still likely to get under contract quickly and with reasonable terms when their homes are priced right, properly prepared and professionally marketed. Buyer demand is still high and inventory is still not enough to meet it.

Tread carefully when deciding how to present your home to the market of interested buyers. Overpricing is a real pitfall that will lock up sellers unable to grasp that the market dynamics are changing. Partnering with a full-time professional agent with experience beyond a seller’s market where the highest and best offer is chosen from a pile of offers is highly recommended. Skills that encompass all kinds of market conditions are not a given just because someone hold a real estate license. The soft skills to start the conversation that leads to getting an offer are absent in those that thought being a listing agent was putting a sign in the yard and collecting offers. Hire your listing agent wisely.

I have been at this since 2005. Making deals that put my sellers ahead of market conditions is what I do, no matter the current dynamics of the market. My listing process starts with detailed analysis of the market and listing preparation advice that will lift buyer enthusiasm. Combined with professional level marketing, sellers go under contract faster and walk away with more money than their competing listings. It would be a pleasure to help you do the same.

When Going Under Contract is Not Immediate

When Going Under Contract is Not Immediate

Not every home goes under contract immediately. It is still a seller’s market out there. I have recently negotiated deals from Bristow to Woodstock and last night, Middletown. What is happening in the market is a shift in buyer behavior. They are no longer prone to acting in a frenzy. Their actions have become far more deliberate as rising mortgage interest rates, coupled with the steady increase in home values, have pinched affordability. Buyers just entering the market are looking for smaller homes than they were a year ago, or homes further out.

The home pictured above at 6717 Middle Road took forty-two days to go under contract. (pause for reader gasp) Hold on there. That’s not all that unusual. Looking back to my listings to January 1, 2021, I found one that had higher days on market at fifty-two. The next highest below Middle Road was a home at thirty-one days. Mind you, my average days on market in that time frame is nine days. Median days on market is four. What takes some houses longer to go under contract than others?

PRICE

Price is usually the first, sometimes the only culprit to remedy when a property is not going under contract. If a seller does everything you tell them to do and the home is showing in immaculate condition, the price is the problem. Newer agents, licensed during the seller’s market boom since the pandemic, may not even realize that price can be a problem. They may give you feedback that the home doesn’t have a finished basement or the high level finishes expected. When their buyers pick higher priced houses with those traits and don’t pick yours, that means the price needs to come down. Let’s face it, there is zero sense in finishing a basement vs. lowering price to compensate for not having one.

TIMING

Sometimes, selling a home too soon after a purchase gives buyers two feelings. The first one is, “What’s wrong with the house?” Two of the sellers I have helped with the highest days on market owned their houses less than eighteen months when they listed them with me. In both cases, life circumstances precluded holding onto the homes. One was meant as a second home, but the owner wasn’t able to utilize it as much as she had hoped due to life circumstances. The other was a job transfer right after it was purchased.

The other feeling buyers had about these homes was about time owned in conjunction with list prices. “They are asking too much. They only bought it eighteen months ago.” Despite HUGE value increases during those times, buyers felt they were the judge and jury of how much these sellers should make for their short time of ownership. This feeling is pure jealousy and has nothing to do with market value. They will often feel value has solely to do with what an owner has done to improve the home. In the crazy market we have experience since 2020, demand alone was enough to justify high value increases.

CIRCUMSTANCES BEYOND YOUR CONTROL

Sometimes there can be a combination of factors contributing to high marketing time, not the least of which are circumstances beyond the seller’s control. Maybe you list a property in winter and you get snow storm after snow storm. Maybe you have a vacant home with, unbeknownst to you, poor drainage, live out of the area and experience torrential rain storms twice a week that leave puddles in your basement. You only find out because of agent feedback. Yikes! Middle Road had a timing issue (lots of judgement over how much the seller was asking having only owned the home eighteen months) and then water in the basement in puddles. Despite the latter being disclosed, then corrected to not be a problem, buyers were hesitant. To buyers who had been squeezed out of areas with newer homes not prone to such issues having different foundation structures, there was a bit of panic. What did the seller do? First she lowered the price. Then she hired a home inspector to do an entire property inspection and posted the very run of the mill, ordinary results for buyers and their agents to read. Now, they had a resource above either of our heads, to discuss the findings. Guess what? That’s when it went under contract. And without an inspection contingency because she had done the inspection for them.

Some homes just take longer to sell. Understanding the dynamics at play and being able to bring considerable experience and skill to the table to help my sellers work around whatever the market throws at them is where I shine brightest. Not every home sale is going to be prep it, photograph it, market it and review offers. There is often more skill and nuance in marketing it.

No matter what the process entails, I’m here to lead the way and make it as stress free as possible. Not all paths to going under contract are short or well worn, but having an experienced and skilled agent on your side that can help you work with the market, not against it, is critical to success.

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