March 2021 was a record-setting month with no signs of slowing down in May. As more listings become available, Realtors and their clients find it challenging to know what to offer and how to stay competitive.
James and Denny provide pointers to buyers and sellers who may be experiencing fatigue and frustration while trying to navigate the current real estate market.
This episode will focus on an increase in selection as more inventory becomes available, the proper mindset for multiple offer situations, making a strong first impression with the listing agent, and the frustrations of not getting a call back after making an offer.
NOTES FROM THE EPISODE:
Currently, the amount of real estate inventory available to homebuyers is increasing. This is exciting for buyers as it provides more selection and reduces the risk of extreme multiple offer situations. Even still, many individuals are finding it challenging to know the best way to navigate the real estate market and may be feeling tired after looking for so long.
As a buyer, how can you overcome real estate fatigue?
- Make sure your finances are in order
- Ensure that your mortgage specialist has all the required documentation. This is very important, and something that you have total control over – preparation is key!
- Do your due diligence before making an offer
- Perform pre-inspections and review permit history
- Be prepared to make a strong offer on a home that you love
- Understand that many homes are still selling subject free
- Have a deposit in hand when you make the offer
- If it is a multiple offer situation, do everything you can to improve your chances
- Write a personalized letter that is edited specifically for the property you are making an offer on. Include a picture and note saying how much you love the home and what it will mean to your family.
- Emit confidence when viewing a home. Try to introduce yourself to the listing agent and make a strong first impression so that they will remember you when going through offers.
- Do not be afraid to try! Make an offer on the home that you love
- Focus on market value (do not fixate on list price) to make an offer that you feel comfortable with.
- Offer at a price that if you lost the property by $5,000 or $10,000, you would not be upset.
- Don’t expect a call with feedback after making an offer
- Not all Realtors will provide updates; you may not know how your bid is doing compared to other offers.
- Be resilient! Buying a home can be an emotional process.
- Try not to get disappointed when seeing a home with a high number of showings.
- Know when it is time to step down if there are a lot of offers on the table. Furthermore, pick a number that you believe to be “a lot” – this could be, 6 offers or 12+ offers.
- For entry priced homes, recognize that 90% of the value is in the land. Try not to get caught up in the small details of the structure if you love everything else about the property.
As a seller, how can you overcome real estate fatigue?
- Listing price is more important now than what it has been in previous months
- In January and February 2021, the final sale price could be drastically higher than the list price because of limited selection and multiple offers driving it up. Currently, prices are not increasing to the same extent due to the higher number of listings available. Be cautious when using the pricing strategy of listing your property low to increase interest.
- Buyers may have been burned by previous offers and can be skeptical of the listing price, asking if it is where it should be or if there will be another “bidding war.”
- Be careful of underpricing! In some cases, this can generate a lot of interest and encourage too many offers (most of which are not competitive).
- May and June are great months for putting your home up for sale
- If you are entering July and August, get more aggressive with your pricing to attract more buyers.
Some things to keep in mind for conquering real estate fatigue:
Even though it has been a reoccurring trend, not every property sells over the asking price. Every situation is different, and Realtors and their clients may be using various listing price strategies. Some listings may be priced too high or low; focus on the home’s market value and decide whether it is worth it for you to make an offer. Remember that it will most likely be a quick sale with subject-free and multiple offers if it is a conservatively priced property.
Predictability is very challenging in June compared to February of 2021. Inventory is increasing, making it tricky for sellers trying to pick a list price and buyers deciding how much they should offer.
Some buyers may be fatigued from past experiences and not want to make an offer on a home even though they can afford it.
Try to avoid the term “bidding war” when discussing popular properties. It can be a scary term that can discourage homebuyers from making an offer in fear of overpaying. Instead, use the phrase “multiple offers.”
What is buyer fatigue?
Buyer fatigue refers to buyers who have seen so many properties, written too many unsuccessful offers, and are flat out exhausted with the buying process. Searching for the dream home can be an exhaustive undertaking and when you are losing out time and time again you start to feel like you will never win a bid.
Visit our blog post 5 Tips to Avoid Buyer Fatigue in Seller’s Market to give you the pointers you need to persevere through this challenging experience.
Is your Realtor the right person for you?
As a homeowner, the Realtor you choose to sell your home can make the difference between maximizing the sale to its full potential and leaving money on the table. In some communities, market value has gone up 20-30% since last fall. Hire a realtor who knows the value of your home and understands how to get the best offer for you.
Check out Three Important Questions to Ask Your Realtor Before Listing for more details!
Are you interested in learning more about the home buying and selling process? Please contact us with any questions you may have. We would love to hear from you!