Wow, what a difference a few months makes. Starting in early 2012 and thorough summer of this year, houses were selling as fast as they came on the market. Most homes were getting multiple offers, and nice homes were getting 10-20 offers. Selling prices were driven up well beyond what most of us expected. Buyers were waving inspections, appraisal and loan contingencies and still getting outbid. Many unsuccessful buyers got frustrated and threw in the towel.
As a broker, it was difficult guiding buyers through the process because it didn’t make sense. We wrestled with how much over asking price should they offer, what protections would they be willing to waive, and would their lender and appraiser support the offering at the end of the day? Nobody wants to pay too much, so there became a struggle to win the bidding war but not overpay.
It was easy representing sellers because you would receive scores of calls and multiple offers. Our job was to sort through all the paperwork, make sure the buyers were properly pre-approved and hope to pick the offer that would actually make it to the finish line. This was not a healthy situation, especially for buyers.
Realtors ended up in two camps: listing agents held the golden goose and many became extremely arrogant and rude. They usually wouldn’t return calls, and acted as if callers were intruding in their life. Buyer’s agents learned creative ways to schmooze sellers with flowery introduction letters, color pictures of the buyers family, and promises that they would make the listing agents job easy.
All of this was fueled by low inventories and the lowest interest rates in the world. Many of us correctly predicted that once interest rates increased, and more sellers came on the market, that things would return to a more normal market.
This brings me to today. As of this morning (11/16/2013), there are 241 homes on the market in Morgan Hill, Gilroy and Hollister. The average time on the market is about 70 days, which means that buyers have a little more time to shop around, and a few more choices to consider.
There is not an abundance of inventory, just a better number than we had last year. Buyers can return to making good sensible offers, ordering the proper inspections and making sure that they are getting what they expected. In the end, they are making fully informed decisions. Please do not confuse this with attempting low-ball offers, making unreasonable demands and expecting huge concessions because that is not the case.
Buyers still need to be pre-approved, have their down payment available and make swift decisions. The difference is that they don’t need to make irrational decisions.
Sellers will need to return to what has been tried and true for one hundred years. Nice homes, well maintained, in nice neighborhoods, that are easy to show and priced right will sell quickly and bring top dollar. You may even get multiple offers and ultimately sell for a higher price.
Overpriced Homes or those which are poorly maintained, dirty, cluttered and hard to show will languish on the market. It seems that every seller has heard the news and knows how hot the market is. However, It is unrealistic is to except a hot market to overcome a home that shows poorly or is overpriced. These homes will sell, they just won’t sell for top dollar, they won’t get multiple offers and they won’t sell nearly as fast as the nice ones.
My best advice is to find a good qualified local realtor who can guide you through the process. They will be able to advise you on the best practices for staging and preparing your home for market. If you want top dollar, they will advise which repairs need to be made, how to stage the furniture, what needs to moved out, what needs to be cleaned and what the best price should be.
For buyers, a good qualified local realtor will know the best neighborhoods, the best schools, the traffic patterns and home values. But best of all, they will know the areas of caution which will impact the enjoyment of your home: things like nearby mushroom farms, landfills, heavy traffic etc.
The bottom line, find a good qualified local realtor who you trust and respect, and you will be happy with the results.