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We had the same issue when we bought last summer. We lost 3 before we put in an offer on our current home and gave them 12 hours to decide. We went in over list within 2 hours of it hitting the market. It worked. I'd recommend that approach if you find one you like.
North Raleigh is crazy. We literally had to put in a bid as soon as we saw a house we liked or it was gone.
List price may not be reflective of value.
Buyers need to offer on value, with a nudge for a recently ascending market.
Too many properties are priced conservatively, with the listing agent knowing that they will go over list price. So, the agent gets to advertise, "Sold for $10,000 over list price," or, "My listings close at an average of 110% of list price."Heck, if they listed $500,000 homes for a dollar, they might could advertise, "My listings sell at 500,000% of list price!"
Focus on value, not on list price.
Additionally, when the sellers and the agent have done their homework, an offer substantially over list price may be clearly in jeopardy of not appraising, or the buyer may just get buyer's remorse for "overbidding." Either way, the sellers are risking that the buyer gets cold feet and walks, and the sellers then have a failed contract on the MLS records.
Next buyers often will assume that there was an inspection issue and are hesitant to proceed.
Because the second contract often comes in at a much lower price, the sellers want a contract that seems certain to close.
List price concerns?
The Devil is always in the Details. Always.
Quote:
Originally Posted by VickiR
This market is CRAZY. No, I do not like it! Buyers are having to make decisions too fast. There is no "sleeping on it".
Due Diligence has gotten higher and if your clients are buying a 25 year old home that hasn't had a home inspection in 25 years, it can be a mess!
Bidding over listed price? Yes. We do it every day. But...I haven't seen too many bid $30K over. I did hear that there were some older homes in Durham, going for that amount but I haven't experienced that, myself.
If you do bid over listed price and are concerned about the home not appraising, there is a FORM for that!!!
This is what seems so tricky with this market. I think sellers are looking at the the comps, but since there is so little inventory not much may have moved recently to be a good comp. So they are pricing based on 2016 comps and those just don't seem to compare to 2017 prices.
And there definitely is the appraisal concern. On two of the houses we lost, the sellers came back to the top offers and asked that we demonstrate our willingness (and ability with bank statements) to pay the difference if the house doesn't appraise for selling price.
And VickiR you are totally right on timing. It's terrible. All five homes we lost have been under contract in 1-3 days after listing.
We had the same issue when we bought last summer. We lost 3 before we put in an offer on our current home and gave them 12 hours to decide. We went in over list within 2 hours of it hitting the market. It worked. I'd recommend that approach if you find one you like.
North Raleigh is crazy. We literally had to put in a bid as soon as we saw a house we liked or it was gone.
Hmm... I didn't even consider putting a deadline on our offer. I wonder if that will work when there are so many other offers, but I'll definitely discuss with our realtor. Thanks!
Hmm... I didn't even consider putting a deadline on our offer. I wonder if that will work when there are so many other offers, but I'll definitely discuss with our realtor. Thanks!
I'm gonna say that giving sellers a deadline may backfire on you (buyer).
Especially if the Agent has this on the listings..."We'll be allowing showings Friday thru Sunday. On Monday, we will look at all offers. Please send your best."
I'm WORRIED for my clients that are paying over "market value". What happens if they need to sell in 5 years and we are now in a buyer's market and inventory is high???
I showed a home that actually had RAILROAD TRACKS in the backyard! I gave my opinion to my clients...that is going to be a difficult home to SELL when inventory is high. They decided not to buy that home. It sold in 2 days!
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Quote:
Originally Posted by VickiR
I'm gonna say that giving sellers a deadline may backfire on you (buyer).
Especially if the Agent has this on the listings..."We'll be allowing showings Friday thru Sunday. On Monday, we will look at all offers. Please send your best."
I'm WORRIED for my clients that are paying over "market value". What happens if they need to sell in 5 years and we are now in a buyer's market and inventory is high???
I showed a home that actually had RAILROAD TRACKS in the backyard! I gave my opinion to my clients...that is going to be a difficult home to SELL when inventory is high. They decided not to buy that home. It sold in 2 days!
RR tracks?
Yep.
I have them, and it would not even be a consideration if I were to sell.
There would be no lack of buyers, due to schools.
Although, a market shift could make me eat my words....
Definitely a good idea, but we haven't had luck so far with that. Even the ones at the top of our price range are competitive. I'm actually wondering if we might have better success looking for houses below our budget and just planning to renovate.
If you go lower, you run the risk that the market is even hotter because more people can afford to shop in that price range. Inventory is just low now, unfortunately.
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RR tracks?
Yep.
I have them, and it would not even be a consideration if I were to sell.
There would be no lack of buyers, due to schools.
Although, a market shift could make me eat my words....
Currently, it is all about lack of inventory. Supply and demand. Not enough homes, too many buyers.
When the market shifts (and it will as RE runs in cycles), and we have a high inventory, buyers will become picky again. They will pass by the house with the RR tracks in the backyard and go to the house across the street.
I live on the side of a road. In years past, my home would sell (North Raleigh/desirable n'hood, desirable area, etc.) BUT I may have had to discount my price versus the similar house down the street. Today? I could sell in a heartbeat for a ridiculous price (if only I could get hubby to agree to downsize!).
To educate my client, I explain what will happen if they buy the house with the RR tracks in the backyard, once the market shifts. Then it is THEIR DECISION to make!
Definitely a good idea, but we haven't had luck so far with that. Even the ones at the top of our price range are competitive. I'm actually wondering if we might have better success looking for houses below our budget and just planning to renovate.
If you think the $400k-$500 pricepoint is competitive.....just wait until you see what it's like below that range!
OP, I actually would highly recommend putting in an escalation clause to your next offer. I know some realtor's here and your own said they aren't for it, but trust me, its worth it. I have gotten homes for 2 buyers of mine doing just this recently.
I actually have a NC attorney-approved escalation clause document I use. Main points are you state you will pay up to $X,XXX over the highest price that is offered, up to a total offer amount of $XXX, XXXX, and that you require proof of the highest offer within 2 business days (and the listing agent blacks out the other offer's personal details except for the financial part).
have you considered having a house built? Maybe rent in the interim?
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