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.
It was clear that the weekend of February 26th (2022) was going to be a busy one. Listing 11620-B Cavalier Landing Court in Fairfax on February 25th and 7664 Duneiden Lane in Manassas on February 26th meant the phone would be ringing and text notifications beeping all day. Forget about enjoying a slow morning or having dinner with family. In the seller’s market dominating the suburbs of Northern Virginia, having two listings is a lot of work for a Top Producing Listing Agent.
When it came to this Greens at Wescott Ridge condo, it was only a matter of hours on the market before the first offer came rolling in. The buyers had requested permission to have a pre-offer inspection. Their desire to come in with a clean offer was strong, but being first time buyers they still wanted the assurance of an inspection. Asking the seller if they would oblige the request, the sellers were happy to sign off on the inspection. A walk and talk home inspection to ease a buyer’s mind prior to making an offer is better than even a Right to Void Only Home Inspection. A walk and talk inspection is a quick run through the house with a licensed home inspector who can give you ideas of the age of systems and give information after a visual look at the major components of the home. It allows the buyer to offer without an inspection contingency at all.
After four days on the market, and an open house that had probably three dozen sets of buyer through, I was shocked that the sellers had only four offers to choose from. Perhaps the geo-political uncertainty that was looming had buyers being a bit more cautious. That or the offers waived off that were simply not going to be competitive would have put us at double that amount or more. No sense building up the field with buyers that are not competitive.
Tuesday morning came and the sellers and I looked through the four offers. There were two that stood out immediately. The first and one of the last. There were very similar. That left a tough decision. The sellers chose the first offer. It was straight forward and had no escalation clause. That buyer went all-in with what they could do and had already invested in the inspection conducted Friday morning. The third offer started their bid at list price and went up in an escalation clause. They also had no contingencies, but with no condo documents in hand, they had an open ended right to void until we could close that loop.
You will have to stay tuned for the final sold price on this Greens at Wescott Ridge condo. If you are an owner in the development thinking of selling, there is more demand and prices are going up. Hit it while they are high! Get in touch for a no obligation consultation and let’s see if a sale feels right for you in 2022.
Before this townhouse at 7664 Duneiden Lane ever hit the market as an Active listing, I had a buyer’s agent or two swirling around wanting to make a sight unseen offer when it was listed as Coming Soon. If I didn’t know any better, I would think it was because the listing photos were so darn good. After all, the sellers let me get a professional photographer in there four months before they listed. They knew that it would be mostly vacant of furniture when it hit the market. Together we decided it would show best with the furnishings that were perfectly on trend and really made the home inviting.
As I said above, that is what I would think if I didn’t know any better. This isn’t my first rodeo. Usually, my listings don’t become Active until the photo shoot is done. Photos are generally the last piece of the listing puzzle. Once they are up, there is usually no sense in waiting to list a home as Active. Even from a single exterior photo, pleas from buyer agents are being made on many listings for a seller to accept a sight unseen offer. Why? These buyers are desperate to get under contract and feel that is the last trick they have left. The side I see in the pleas is that these buyer agents also know that their buyer’s offer will not be competitive once the home is Active and open to the entire market.
Not surprisingly, this townhouse in Campbell’s Trace had non-stop buyer traffic the moment it went active. And the offers got better and better. Every one of the five offers the sellers received were over list price. In the end, the sellers had a choice of multiple offers with no home inspection contingencies, no appraisal contingencies or low appraisal guarantees. That is why it pays to hit the market and be open to all buyers.
Stay tuned for the final sold price. And if you are interested in selling while the market is this hot, get in touch with me for a no obligation market analysis.
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.
My mother has a saying. “Moving is like dying and going to hell.” Certainly, no one looks forward to packing their belongings, hauling them to another location, unpacking them and trying to recreate the organization they had where they came from. As a real estate agent, everyone of my clients is leading up to a move, outside of investors selling or buying rental property. While the majority of them are looking forward to a new chapter in their next home, some are moving not out of want, but out of necessity. This has been my life with my mother for the past five years. Take the stress of moving and combine it with emotionally draining circumstances and you can feel like someone is bludgeoning you from the inside out.
The Move of 2018: It all started with the diagnosis of Alzheimer’s dementia, which came one or two years earlier. Mom was slowly losing ground with her memory. She would get anxious in the car at night, not knowing where she was. She seemed to have trouble keeping new memories and blamed it on getting old. Finally, my brother revealed, mom had called him because she didn’t know her way home from the store. We weren’t convinced mom was okay to be alone anymore and it took us two years, and taking her car from her, to convince her to move to Ashby Ponds in Ashburn. She started in Independent Living. At that point in time, she could still do most things for herself. That was Halloween, 2018.
The Move of 2019: After starting a new life in Ashby Ponds, the depth of mom’s day to day trouble functioning was revealed. A move to such a big community was a lot for my mom. Had we moved her there five years earlier, she may have been able to stay in Independent Living longer and enjoy all the community had to offer. Instead, after a several month attempt at having once daily help with her evening routine, the move to the smaller world of Assisted Living happened in September.
The Move of 2020: Mom thrived in Assisted Living. She really did well there…until the pandemic shut down all socialization and group dining in March. Mom went downhill cognitively as if she was heading downhill from the top of a rollercoaster. And she wasn’t the only one. Residents were like pound puppies, left to live in their small apartments and dine alone. Attempts at video chats didn’t fill the void. And not seeing anyone’s facial expressions due to the masks made reading non-verbal cues hard. Her exit seeking behavior and anxiety made the decision easy. It was off to Memory Care that October.
The Move of 2021: Memory Care was a tough pill to swallow, but necessary at the time. Again, mom found her stride and thrived there. Then, late on the evening of June 29th, mom was roaming the halls anxiously looking for my deceased father and fell. She broke her hip. What started as a short-term physical therapy/convalescence stay in the Post Acute floor of Ashby Ponds, turned into an August move to her hospital room there. She had developed wounds on her heels and required more nursing care than Memory Care would allow. Then, just as I felt like the annual moves were over…
The Move of 2022: Mom has healed enough physically to go back to Memory Care. Believe it or not, this may be the happiest move we have had of all five. Mom is going back where she can thrive in a world meant for her and not be trapped on a floor because of one physical ailment. Plus, she gets back most of her stuff that has been sitting in a storage unit.
Each of these moves has been most taxing on an emotional level. I have found it comforting to make lists of tasks I can do each day and surround myself with a team of compassionate specialists. Last year’s move was really hasty and needed to be done as quickly and cheaply as possible. Every other move has been with the assistance of movers that specialize in relocating seniors. To this day, I really wish I had hired the senior move service last year.
Mom doesn’t realize she has moved most times. It’s a tough thing on my brother and me. We have had to downsize her each time and that process is always painful. We end up going through photos and nick nacks evaluating whether or not she needs or wants them. Most times the answer is no, so we divest of her belongings, as you would when a parent dies. I hope that this fifth annual move is our last. The struggle of moving elderly family members who are in decline is one of the hardest moves you will ever undergo.
As a licensed Associate Broker in Viriginia, my job is to help sellers get great terms when selling their home in the time frame that suits them best. As a daughter who has dealt with an annual move of my declining mother, I am honored to make moves like these as easy as possible for my elder clients and their family. I am happy to share whatever experience I have gained from having been down this well worn path. Please don’t hesitate to call me if I can be of assistance.
It seems as though the outer suburbs of Northern Virginia, anywhere from Gainesville to Fredericksburg, agents on both the listing and buying side of deals are encouraging sight unseen offers. To a seasoned real estate agent like myself, the thought is bone chilling. Yet, I have seen and heard the statements from listing and buying agents alike encouraging them.
As a listing agent, I have a hard time encouraging my sellers to take a sight unseen offer. There is way too much room for the buyer to get buyer’s remorse. In fact, the most recent listing I had hit the market and had a sight unseen offer so high above list price, with a low appraisal guarantee to cover the difference between our list price and their sales price, that I had to double check with the buyer’s agent to make sure that the buyer knew what they were doing. There was no way the home was going to appraise for the price the buyer offered.
The buyer’s agent was very heavy handed with his client and told him that was the only way he was going to go under contract. He proudly told me that. Well, my sellers were cautioned about taking it, made some adjustments to the offer, countered and there was silence. By this point in time, the buyer had studied up on the community. Hmm. Interesting that didn’t happen before he had written this offer. Remorse set in as soon as he realized there were condo fees, which are always higher than HOA fees. I knew something wasn’t right with that offer. The buyer vanished into the ether.
Then, as a buyer’s agent I was beating the street from Stafford County to Western Prince William County, trying to get a leg up for my out of state buyers. More than three listing agents encouraged sight unseen offers. Mind you, my buyers are out of state and not able to fly in for a home tour. The idea is laughable. They would have to book their plane tickets the moment a home of interest came up as Coming Soon just to accompany me on a drive by looksie. Naturally, to be the best offer, it would have to be minus inspection contingencies. It is madness, but buyers are jumping at the chance. What choice do they have?
It was nice this evening to open up the MLS portal I have set up for these buyers and see a listing where a sight unseen offer had been encouraged and accepted come back on the market. My buyers lost out because they had not been comfortable making that move. Turns out, the buyer that did could not move forward. I was told their former listing agent encouraging acceptance of a offer contingent on a home sale. Now it is back on the market with a new listing agent and thankfully, she told her sellers to let it get some tours through. A breath of fresh air to find an agent not indulging in the Coming Soon, sight unseen offer madness.
Remember, buyers are going to see the house eventually. Why not just wait it out and let them see it? Maybe the offers won’t be as high. Maybe they will. What I personally know is that the offers would be one hundred percent legitimate and not made under duress or fear of losing another home.
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.
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.
Attention to Detail Matters Even in Shredding Files
When you are studying to obtain a Virginia real estate license, one of the details is that is ingrained in you is that our licensing entity only requires brokerages to hold onto files for three years. That works well with the Virginia Statute of Frauds having a two year expiration from the time fraud was committed. Of course, our commonwealth law is not the only law that can apply to a real estate file.
Over ten years ago, while representing a buyer, I uncovered what appeared to be mortgage fraud. A fly-by-night investor who had taken a course in buying up distressed properties that were headed to foreclosure was crossing many lines in selling homes. State laws were being broken and ultimately, when reported to the FBI, it was the federal laws broken that mattered. Turned out, the Federal Statute of Frauds time limits are different. In the case of this investor, the statute of limitations for bank fraud was five years.
When the Federal Prosecutor called me before the Federal statue of limitations had expired, I was fishing through email for remnants of the file since the paper copy had been shred. Let me tell you, that’s not a great feeling. None the less, with what I had turned over to the FBI nearly five years earlier, was enough to kick off an investigation that would land this investor in Federal Court and ultimately, behind bars for five years.
As I shred files from 2014 and move into 2015, I realize that I am not a typical Viriginia real estate licensee. My experience in this career has taught me so much more than a lot of my fellow licensees care to even entertain. Attention to detail is the most important thing a real estate licensee has, but if they are trained to the bare minimum of details, it is their clients that pay the price. This is an industry where the required level of training does not even begin to cover how an agent can truly benefit their clients, industry and society at large. Being inquisititive and learning the ins and outs of contracts, mortgage, title and insurance are what make the agents that do attain this level of knowledge invaluable to their clients.
If you require more than the bare minimum from the person guiding you through your home purchase or sale and reside in or around the areas on my chalkboard to the right of this post, I would love the opportunity to help.
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.