Date:June 4, 2015
What Buyers Can Expect in a Seller’s Market
posted by: Generator Real Estate in Market Conditions, Tips and Tricks
The amount of competition for home buyers in the metro Denver market can be aggressive and brutal, particularly in desirable neighborhoods. The lack of inventory of available homes to purchase has resulted in an imbalanced market where demand drastically outweighs supply. As a result, the offer process for listed homes is becoming more and more like an auction. Homes are typically listed on Thursday, allowing showings to prospective buyers Friday and Saturday, requesting “highest and best” offers submitted no later than Sunday, for a Monday decision from sellers. What buyers are experiencing is that their offers require an extra degree of tact. Here’s a little of what buyers can expect in our highly competitive market.
Multiple Offers – It is more than likely that buyers will be competing against another offer and the reality is in some neighborhoods you will be competing against several additional offers.
Over Asking – Buyers should know that people are paying over asking price for desirable homes, assuming a home is reasonably priced to begin with.
Cash – All-cash offers will typically find their way to the top of the stack followed by those preapproved for a mortgage putting a significant amount of cash down and/or available to cover any shortfalls between contract price and appraised value.
Source of Financing – The reputation of the source of financing (bank, mortgage, lender or broker) and their relationship to the buyer’s agent is scrutinized like any other aspect of the transaction.
Contingencies – In some instances buyers are choosing to waive parts or all of their rights to contingencies (inspection, appraisal and loan) to eliminate potential pitfalls and improve their offer’s chances.
Heart Strings – It has become common practice for buyers to write emotional “love letters” to the sellers intended to tip the odds in their favor.
Possession – An offer contingent on selling a current home will typically not be seen favorably. In contrast, a buyer who is willing to allow sellers to rent their former homes for a few months until they find a replacement may be well received.
The bottom line is that sellers are looking for the highest offer with the least risk of falling through and the most flexibility for the seller.
Zach Sloven – Broker