Q: What is a seller’s market?
A: A seller’s market is defined by the fact that we have more buyers than sellers. When a buyer sees a home that fits into their budget, that buyer needs to make offer on the spot because the seller has more offers from which to choose.
Q: Where are all the homes, and why don’t we have more homes available to buy?
A: We have had interest rates between 3.5 and 4 percent for over a year now. Buyers and investors have been buying, which means the supply of available homes has seen a quicker reduction in the last 12 months.
Q: If a serious home buyer makes an offer immediately, will that get him a home?
A: Not necessarily. Serious home buyers are making offers over the asking price. When a home receives multiple offers, this creates a bidding war. Sellers then have to choose the strongest offer.
Q: What is a stronger offer if I am a serious home buyer?
A: A stronger offer is one that asks for no closing costs and no repairs. A stronger offer is from a buyer who is putting money down on a home or willing to pay cash.
Q: Can sellers command any asking price?
A: Not in this market yet. Buyers in the 21st century are very well informed about comparable home prices in their local area. Sellers who are asking an unrealistic price for their home will need to reduce the asking price to the current market value in order to sell or get an offer.
Q: Why are we seeing multiple offers on the first day when a home hits the market?
A: Because there are more buyers and not enough available homes. A serious home buyer has to make strong offers to outbid the other buyers on the first day the home comes on the market.
A recent home search for the Sparks area returned 52 single-family homes built between 2000 and 2012. These are three-bedroom detached homes priced under $150,000. Out of the 52 homes only two are still available because these two homes are overpriced. These two home sellers will eventually need to drop their prices in order to receive an offer.
Steps to scoring a home for a serious home buyer
Step 1: Get a home loan. Know your down payment and monthly payment.
Step 2: Focus on one area that will best suit your needs. Do you want to live close to your work? Do you want to live in an area where they offer great schools or shopping for your family? Your ideal home may become available in the next week, or next month. You will be happier if you do not settle on a home too far out of the best area for you and your family.
Step 3: Work with an experienced local real estate agent. Collect the information you need. Review listings often with your agent. You might want to compromise on size of home – for example, single-story vs. two stories -- when a home in your focus area comes up, always keeping in mind that buying a home is all about location, location, location. You can change the color of the paint, you can re-landscape, but you cannot move the house to a different area of town.
Step 4: Act aggressively when an ideal home comes up in your focus area. If you are planning to make a low-ball offer and your agent is not recommending it, find out how many offers homes in the same area are receiving recently. Most affordable homes are receiving up to 12 offers on the first day.
In conclusion, if you are a serious home buyer make a strong offer, which is above asking price. A serious buyer should not be asking for any repair costs from the seller. A serious buyer should be willing to pay for their own closing costs (escrow, title fees, etc.).
Homes come on the market everyday. A serious homebuyer knows where he or she wants to buy and has a home loan secured. The right home will come along this summer. Happy house hunting!
Annie Christian is a real estate broker and owner of The Annie Christian Real Estate Group. She helps with everything from buying and selling to foreclosure and short sale. To submit a question, call 351-5117. Her website is www.anniechristian.com.