There’s no doubt we’re in one of the hottest real estate markets in the country. This generally means that we’re in what’s called a ‘seller’s market.’ Demand for homes is extremely high as people relocate to Texas, and our supply is having trouble keeping up. This creates a situation that highly favors the seller, and makes for a competitive climate. Unfortunately for potential buyers, this can make the already emotional experience of purchasing a home even more so, with high highs and low lows.
How can one tell when they’re in a highly competitive housing market? There are a few telltale signs. We asked our expert HomeCity real estate agents how they navigate these rough waters.
- Homes are selling in a matter of days. Homes seem like they are sold before they even hit the market (and some actually are)! Buyers need to move quickly to find the best deals and put in a good, strong offer before their competitors do. “When homes are selling quickly in a competitive market, my best advice is to put your best foot forward with your initial offer,” advises Seth Thompson, Broker at HomeCity. “I have seen buyers lose the home they really wanted simply because they offered just a few thousand dollars below the ask price and another buyer swooped in to win the home with a full price offer.”
- There are fewer properties to choose from. “A sure sign of being in a competitive market is the number of days a home is active,” says Christina Mugno. When homes are active fewer days, the inventory of homes is usually very low. “I have sometimes had my clients look at homes on a Tuesday instead of the weekend; that seems to eliminate as many offers to compete against as possible.” That way if her buyer finds the perfect home, they’ll have a better chance of their offer being accepted.
- Multiple offer situations are common. Since there are so many people competing for the small number of available homes, it’s fairly common to run into a situation where many offers are put in for the same house. “In a competitive market, it's critical to present the absolute most professional offer you can,” says Greg Vassaur. “Presentation goes a long way. Include a summary page to start detailing the highlights to make it easy for the selling agent and seller to make a quick decision. Make the offer a "package" so the seller and agent are forced to look at everything. Include a market analysis to justify your sales price. Communicate that an inspection is already scheduled to occur within 24 hours of contract execution. If you don't have multiple inspectors that can do that for you, find some others. Presentation sets the stage as you being knowledgeable, thorough, and willing to take a few extra steps to get the deal closed.”
- There are more cash offers. There’s the saying “Cash is King”, and this holds true in the real estate realm. A cash offer on a home definitely has more appeal for a home seller and in a competitive real estate market, cash offers are more frequent. “You’ll want to help your offer look as attractive as possible, even if you can’t put cash down as an option,” warns Carmen Nichols. “You may have one shot in a multiple offer situation so take the advice of your trusted Realtor®. You can do things like offer to pay closing costs, offer over asking price, or guarantee a quick closing. Anything to sway the seller to accept your offer instead of the cash.”
- Buyers are more willing to compromise. “You know you are in a hot market when you receive multiple offers on a 'coming soon' and every one of the offers are above asking price,” says Mike Williamson. They’re not only willing to compromise on price but will do other things to “sweeten the pot” for a seller. It’s common for homes to be sold ‘as is’ and many buyers will not push the seller to make repairs or deep clean the home. Basically, the ball is in the seller’s court. While this is great for sellers, it can be a bit frustrating for the buyer. Knowing is half the battle, though, and having an experienced agent can help navigate the playing field.
These are just the tip of the iceberg when it comes to navigating a competitive market like ours. Now, more than ever, it’s imperative to employ the help of a knowledgeable real estate agent. Having some expertise in your corner could mean the difference between the home of your dreams and settling.