5 tips for making an offer in a hot real estate market

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Steady demand. Limited supply. That’s what we are seeing in real estate markets across the country right now. Inventory is particularly tight within the lower price ranges. “The starter house is nearly missing in some markets,” according to Jessica Lautz, managing director of survey research and communication for the National Association of Realtors.

Of course, conditions can vary from one city to the next. But the overall trend in housing markets across the country is that supply is still falling short of demand. Given these conditions, it’s important for home buyers to make a strong, smart offer when the right house comes along. Here are five tips for doing exactly that.

1. Understand the supply and demand situation in your area.

According to housing experts, a so-called “balanced” real estate market has five to six months of supply. This means, in theory, that it would take five or six months to sell off all homes currently listed for sale, if no new properties came onto the market.

Many real estate markets across the country have less than a three-month supply right now. And some cities have less than a two-month supply.

The first step to making a strong offer is to understand the supply-and-demand situation in your area. We are still seeing sellers’ market conditions in many cities, as of spring 2018. And this could persist for some time.

2. Study recent sales prices in your area.

This is something a real estate agent can help you with, but you can do some of it for yourself. The idea here is to get a good understanding of recent sales prices in the area where you want to buy.

This will help you in a couple of ways. It will save you time during the house-hunting process, by eliminating the need for repetitive research and pricing “sanity checks.” It will also help you make a strong, realistic offer backed by recent sales trends. And speaking of offers…

3. Make a strong and timely offer, backed by comparable sales.

In a slow housing market, where sellers are ready to jump on the first offer that comes along, home buyers have the luxury of taking their time. A buyer might start off with an initial offer below the asking price, just to open negotiations. The seller would probably come back with a counteroffer, or accept the first offer.

But it doesn’t work that way in a more competitive real estate market with limited inventory. In a tight market, buyers are better off making their first offer as competitive as possible. Otherwise, the house could go to a competing buyer.

4. Consider writing a love letter to the seller.

A house love letter, that is! Recent studies have shown that buyers in competitive real estate markets can improve their chance for success by writing a heartfelt letter to the seller. Sure, real estate is a business transaction. But there’s a personal side to it as well. Writing a personal letter to tell the sellers what you love about their home might just tip the scales in your favor.

5. Get an agent on your side.

It’s always a good idea to have help from a local real estate agent. It’s even more important in a tight market with limited inventory. An agent can help you move quickly, putting together a strong offer that’s supported by recent sales data.

~Content provided by MetroDepth

More Homebuyers Making Offers Without Seeing Property in Person

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The hot housing markets in Seattle and others like it across the U.S. are leading more homebuyers to bypass the traditional concept of actually seeing, in person, the place they’re looking to buy and live in.

A new survey and report from Seattle-based real estate company Redfin reveals some of the trends being set by a new generation of homebuyers looking for ways to get ahead in the ultra-competitive landscape. The report details such things as how affordability was leading to adjustments in where to look; how political views of potential neighbors might affect the search process; what impact immigration restrictions have on Arab, Asian and Latino survey respondents; and the impact of rising mortgage rates.

But we were most intrigued by the fact that a third of homebuyers who bought a home in the last year said they made an offer on a home without first seeing it in person. Redfin says that’s up from 19 percent last year and from 21 percent two years ago. Millennials lead the charge here, with 41 percent saying they had done so.

Redfin site unseen offers
In Seattle the number is a little lower than the national average, with 22 percent making an offer site unseen. Redfin says the percentage of those willing to buy without looking tends to rise as the median home price rises. The median in the Seattle area last May was $510,000, while San Francisco, for instance, had a median price of $1,290,000 and 35 percent made an offer site unseen. Here’s the survey breakdown:
  • Home price less than $250,000 – 19.5 percent made an offer site unseen
  • Home price $250,000-$499,999 – 24.2 percent made an offer site unseen
  • Home price $500,000-$749,999 – 41.2 percent made an offer site unseen
  • Home price $750,000 – $999,999 – 51.8 percent made an offer site unseen
  • Home price $1 million plus – 58.3 percent made an offer site unseen

But it’s not like these offers are being made with no clue whatsoever about what a house looks like. Obviously there are plenty of ways to view photographs and video tours online, and now 3D photography, including Redfin’s 3D Walkthrough, lets people virtually walk through Redfin listings.

Seattle-based Zillow has also added more technology to speed the process with the test launch last month of Instant Offers, in which home sellers can avoid traditional hassles and sell more quickly.

~Kurt Schlosser, Geekwire