You may have heard that homes for sale seem to be as scarce as a snail at a track meet. The shortage manifests itself practically everywhere so getting the most competitive deal in a seller’s market can be a tricky venture. This is a real estate market like we haven’t seen before…you are literally at the mercy of the seller. Seldom have the services of a realtor been more critical than right now. To avoid being a victim in a seller’s market takes skill and expertise. I am here to give you tips on what to watch for and how to maneuver in this high-stress market.
Moving in today’s market can be pretty dicey, especially if you are relocating to the same area. Today, I’m excited to share the pros and cons of a seller’s market, so you don’t get caught homeless! I would prefer not to share a list of bridges you may get caught living under, it’s bad for business.
The term “seller’s market” refers to situations where there is a greater demand for housing than supply. People are also moving here with cash from states like New York, California, and New Jersey, snatching up homes. In addition, the pandemic has made remote working more accessible. So the question is, why not move to the Treasure Coast in Southeast Florida, where the cost of living is reasonable along with many other perks? Florida has no state income taxes and you can enjoy the year-round sunny, warm weather amongst beautiful beaches.
In a seller’s market, there are many PROs;
1. Cash in on Equity:
Sellers, you may realize that now is the time to get your home on the market and cash in on your equity. With interest rates at their lowest, point in history, they are now slowly rising. The demand for housing is enormous. There’s never been a better time to sell. In this market, there is scarce inventory for resale and new construction. Now is the time to get that equity and either put it in the bank or invest in another home for yourself.
2. Multiple Offers
With a limited inventory of homes and more and more people relocating to Florida, sellers are getting multiple bids on their homes at the highest prices. Many are even selling in one day! You may own a home but you just want to move into a newer home or perhaps you’ve decided to downsize upsize or move into assisted living. Whatever it is this may be the right time for you to sell.
3. Cash Purchasing
There are a lot of cash buyers which is a plus for a seller and no worries about an appraisal. If a buyer is getting a mortgage (rates are historically low) and your house doesn’t appraise, most buyers are choosing to bring more money to the closing table to continue with the purchase, however, that’s not a guarantee.
4. Contingencies are being waived
Contract negotiations are in the seller’s favor and contingencies are being waived! That means you can pick the closing date and the length of time for inspections. As a matter of fact, some buyers are even willing to waive the inspection period to get that home under contract. Not that we recommend that.
5. Lease back your property
Uh oh! You haven’t found a place to move to? When negotiating the sale of your home, consider renting back your home. In a seller’s market buyers are more willing to give in to the seller’s wishes and may make your transition a little easier. For instance, rather than having to find and rent another property and move twice. Again, this might not be possible so have your exit plan in place if you can’t rent back your home.
The CONS of a seller’s market:
1. Competition for a new home is tough.
Are you interested in moving within the same area? Good luck! How much are you willing to do on the other side in order to get your offer accepted? Perhaps you’re relocating out of state? It is essential that you know the market conditions in the desired location. Almost everywhere, housing shortages are a problem. The timing and planning of your future move should be carefully considered. Even money in the bank from your sale is little comfort if there is little chance of finding what you are looking for. I don’t recommend living on the street. There are even shortages of tents in San Francisco, at least according to locals.
2. Money Talks.
Offer at least a 10%-20% down payment or better yet, are you able to fully pay in cash? Buyers are having to bid on and compete with a large number of other buyers. So if you are a buyer, don’t be surprised if you must bid (even on new construction) and write an offer on more than one house, especially if you are getting a mortgage. You need to have a mortgage approval , not just a pre-approval. Being ready to go is essential if you are hoping to have your offer accepted in this competitive market is essential. A mortgage contingency is a turn-off to many sellers so get your finances in order.
3. Buyers are at the mercy of sellers:
When a buyer wants their offer accepted, they often waive inspections just to ensure that their bid is accepted. There is no doubt that these are crazy times, aren’t they? Unless you are handy, I would not recommend you to use this method.
4. Moving to new construction
The build time varies, but do not be surprised if it takes at least 1 to 1-1/2 years to move into your new home. It is expected that builders will seek top dollar for their homes…and they are likely to get it. This is because the demand for housing is so high that it is taking longer to build homes. You shouldn’t consider signing another contract on another home unless all the contingencies in your home’s contract have been met and the sale is ready to close.
5. Temporary Rental
If you don’t find a house or your offers don’t get accepted you may have to rent short-term or possibly long-term. Even rental inventory is very limited, and landlords are receiving multiple offers on each home. You may have to put everything in storage and be willing to accept living in a rental that may not be your ideal in the meantime. Sometimes even a lease is challenging to come by if you have pets, a pickup truck, commercial vehicles, a boat, or a fifth-wheeler that you like to keep in your yard.
In conclusion…
When considering a move in this market, it is more imperative than ever that you work with a full-time seasoned realtor. Better yet one that knows the national market not just the Florida market. You want an expert on your side to fight for your interest in this excessive bidding environment. It will make all the difference to the outcome.
If you have questions about moving in this market, or to another state, leave your question below in the comments or give me a call! I can refer you to a great Realtor in your area. Thanks for reading and Happy House Hunting.
