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More like finding a needle in a haystack and then fighting over it with 30 other needle-seekers.
RE agents only make money when a transaction closes. Transactions only close when a seller sells and a buyer buys....Inventory is at historic lows by a significant margin. Homeowners aren't selling their homes and thus prospective buyers have an extremely limited supply of homes to buy.
Correct! Nope, not easy and very sad when you have a hard time getting a home for your buyers. Not stress free for your sellers either.
Sellers have to actually leave their home for a few days when the craziness ensues. Easier if the home is vacant. Reminds me of feeding the catfish at Myrtle Beach. A feeding frenzy!
Then, there is going through the offers with the sellers and explaining why the highest offer isn't the best offer. There are the Agents that write up a ridiculously high offer, knowing the house isn't going to appraise.
Once you accept an offer, there is the home inspection to get through. Buyers have paid over listing price and now expect ALL repairs to be done so there is that to negotiate through. Back and forth for a few days. Made worse when you have to deal with the buyer's agent who isn't the best at communication!
Of course, holding your breath until the appraisal comes back is always fun!
So many issues come up that affect sellers so they are under lots of stress. That is why moving is in the top 5 major stresses. And if you are trying to get your sellers out of their current home and into their new home, there is the timing issue. Worse if the buyers are also selling a home. Dominos!
And if you are the buyer's agent...how many offers do you write up before your buyers get an offer accepted?
Nope, not easy. Working with buyers and sellers that are totally stressed out over the whole situation means you have to have plenty of understanding, plenty of patience.
And the other hand, I wouldn't want to do anything else! Glutton for punishment?!!
If the seller decides to not make all repairs, the buyers do not get their due diligence returned?
No, the buyer doesn't get the due diligence fee back. Repairs become a new negotiation.
Inspectors list all types of repairs. They will list re-caulking an area (example around the tub) but sellers seldom agree to that repair. They will list having a carbon monixide detector hard wired but that is a building code that may have been added after the home was built so many sellers will not agree to that.
Let's say, for example, termite inspector notes live termites. Buyer asks seller to have termite treatment done but seller doesn't agree. If buyer walks, he loses due diligence BUT seller must now disclose to next buyer that home has termites.
Sounds like seller is going to have to take care of getting rid of the termites so he may as well agree with this buyer instead of putting house back on market.
Like I said, repair list is a negotiation. Most repairs are small but sellers need to know that depending on how well they have maintained their home, they should expect to have repairs that will need to be done or give buyers monies to do their own repairs.
Then, there is going through the offers with the sellers and explaining why the highest offer isn't the best offer. There are the Agents that write up a ridiculously high offer, knowing the house isn't going to appraise.
Of course, holding your breath until the appraisal comes back is always fun!
!
I was under the impression that there is no problem with an offer over the appraised value as long as the Buyer is willing to come up with the cash to offset that amount (i.e. if they are even needing a loan). If so, I would hope that the agent has explained this to the Buyer so that the Buyer knows, and can confirm, that he has the extra funds available for this. And as a Seller I think I would require some financial data/confirmation from the Buyer if they were to make such an offer to ensure that the deal wouldn't fall through. Am I correct to assume this?
My daughter and her boyfriend are starting to look for their first place. They are now paying close to $2000 for a 1 bedroom luxury apartment which is ridiculous IMO. With this market being so difficult for Buyers, I would imagine there are more than a few that have paid over appraisal. Are their strict guidelines for appraisers? Do they ever consider the number of offers on a place and the amount of those offers in addition to the other things they look at?
We bought during the housing boom in 2005 however there was still a lot of inventory and new construction (which is what we bought). So thankfully we never had to deal with that here (nor in California).
I was under the impression that there is no problem with an offer over the appraised value as long as the Buyer is willing to come up with the cash to offset that amount (i.e. if they are even needing a loan). If so, I would hope that the agent has explained this to the Buyer so that the Buyer knows, and can confirm, that he has the extra funds available for this. And as a Seller I think I would require some financial data/confirmation from the Buyer if they were to make such an offer to ensure that the deal wouldn't fall through. Am I correct to assume this?
My daughter and her boyfriend are starting to look for their first place. They are now paying close to $2000 for a 1 bedroom luxury apartment which is ridiculous IMO. With this market being so difficult for Buyers, I would imagine there are more than a few that have paid over appraisal. Are their strict guidelines for appraisers? Do they ever consider the number of offers on a place and the amount of those offers in addition to the other things they look at?
We bought during the housing boom in 2005 however there was still a lot of inventory and new construction (which is what we bought). So thankfully we never had to deal with that here (nor in California).
With an offer significantly over list price, it is recommended that the buyer include an Addendum to the Offer/Contract committing to pay up to the contract price if the appraisal comes up short.
This stuff is all too crazy nutty for me...I'm just glad my house is bought and paid for and I have no plans or desire to move anytime soon. I get cold calls all the time from people wanting to buy my house.
Talk about SOO different in NJ. I sold a house there in 2019. The first two buyers backed out - one a week after the inspection, and the 2nd one just a few days before closing (she died!). We didn't retain any of the DD money (not that it was a huge amount). Also, it's near impossible to close in less than 45 days up there! It was a pretty miserable selling process really!
It's insane here in NC now. I was so lucky to purchase my $208K house in Holly Springs in Dec 2019. It was an OpenDoor house and I think people hadn't realized it had gone back on the market after being contingent.
I was under the impression that there is no problem with an offer over the appraised value as long as the Buyer is willing to come up with the cash to offset that amount (i.e. if they are even needing a loan). If so, I would hope that the agent has explained this to the Buyer so that the Buyer knows, and can confirm, that he has the extra funds available for this. And as a Seller I think I would require some financial data/confirmation from the Buyer if they were to make such an offer to ensure that the deal wouldn't fall through. Am I correct to assume this?
My daughter and her boyfriend are starting to look for their first place. They are now paying close to $2000 for a 1 bedroom luxury apartment which is ridiculous IMO. With this market being so difficult for Buyers, I would imagine there are more than a few that have paid over appraisal. Are their strict guidelines for appraisers? Do they ever consider the number of offers on a place and the amount of those offers in addition to the other things they look at?
We bought during the housing boom in 2005 however there was still a lot of inventory and new construction (which is what we bought). So thankfully we never had to deal with that here (nor in California).
I feel for anyone in a similar situation. What is happening with housing is very similar from a government policy POV as student loans. The government wanted to encourage education, so they made loans easily available and subsidized. As such, college costs keep spiraling. The fed has artificially kept rates low by pumping money into the system, inflating the appreciation that is going on. The new admin is proposing $15k first time buyers credit (like in 2010? But double) which all that will do is push up the cost of homes $15k. The new treasury secretary was the Fed reserve chairman under Obama, and stated "housing will be used to drive the recovery". They know there isn't really anything else that can, since we don't make anything here anymore.
Keep an eye on energy prices. Since the election, oil is up 50%. There has never been a modern day recession without a run up in energy prices. If energy stays relatively stable, what you are seeing today as far as housing goes will just get worse. More appreciation and less inventory.
I'm in a similar spot. Except I want to move. My home is in the "first time buyer" price range but I refuse to sell as look at what I would be buying into. A frenzied market selling mostly crap at well above asking and having to make major concessions and take risks. Not doing it. We have all cash for the next home as well.
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