It may seem like an odd question to ask your real estate agent when you plan to sell your home and upgrade. You may be surprised, but Leah and I have been asked this multiple times during this strange and unexpected housing market. The past two years have been difficult for buyers. First-time homebuyers may find it hard to win an offer and not feel like they are giving away their life savings. When you decide it’s time to move and hear the rumors of how hard it is to buy, you may start to question, worry, and think, “maybe I’ll stay in my home.”
So why do sellers feel they will be homeless if they sell their homes? Well, let’s look at what we have personally seen as Real Estate agents working with our clients:
- Low inventory: Buyers are having a hard time because Sellers are deciding to wait (precisely what we are talking about here)
- Contingencies: As a Buyer and Seller simultaneously, you are having a hard time having your offer accepted because there has been no action on selling your property.
- Cash is King: We have seen many cash buyers during the pandemic and investors during this interest rate hike giving them an advantage in competing offers
- High sales price: Many houses are selling above asking, multiple offers, waived contingencies.
You list your home to sell and get multiple offers in the first couple of days. The problem is that you haven’t even found a house you like to purchase yet. You start to worry that once you accept an offer, you’ll have to rush and pick a home for yourself that you aren’t too sure you love. Even worse, you’ll sell your home and be back in your parent’s basement! You may feel like you won’t be able to win an offer if you find your dream home. It takes a heavy toll mentally and emotionally. As the seller, in a way, you have more leverage than a buyer, simply by stating in your agreement, “contingent on Seller finding suitable housing.” That, right there, is your safety net. With that phrase, every party knows we cannot move forward until you find the house that works for you!
For example, a client recently had a hiccup at the tail end of their transaction. A minor, easy fix could have delayed us another week in purchasing their new home. The problem was that they were scheduled to close their current home in two hours! Would they end up homeless? No. “Contingent on seller finding suitable housing” was the saving grace. Don’t get me wrong, it would have been very upsetting to all parties involved, but no one would be homeless. Thankfully, we have a fantastic team that cleared that issue in a snap and was able to close on time!
Cash is King:
Every agent will tell you we love a client that can purchase a home with cash. Cash is King. The past two years have seen a strong seller’s market and increased cash buyers. We have certainly felt the disappointment in losing to a cash buyer because – did we say this already? – Cash is King.
A few months before the interest rate spike, clients of SSRG put offers on over 15 properties in just a few short months. All the offers were above asking, with excellent terms, and yet did not win. Things are starting to change, however! The end of this year is not the same as how it started. Our past sales have seen offers accepted. Any homes sold above asking have come back with an appraisal supporting it with no need to use the “appraisal gap contingency.” Gone are the days of a home with 50-80 offers, but you may still experience a bidding war on a smaller scale.
People need to realize that we saw unprecedented high sale prices and historically low rates in the last two years. With the interest rates rising, we are seeing the real estate market finally stabilize.
High Sales Price
Sellers during the past two years could take advantage of making a large profit selling their homes. However, buyers had a hard time battling with the decision not to pay more than the home was worth or miss out on the perfect home. Especially with the words “Market Crash” looming in the media.
Our final thoughts: Everyone’s situation is unique. Find an agent who makes you feel comfortable and protected. One that communicates with you and makes sure you know every fact and detail of the sale and purchase of your home. We are in the market to find people’s homes, not make them homeless. If you think you are ready to sell or purchase a home, call Leah and me. We can go over the next steps or answer any questions you may have in detail over coffee!