Horrors in the reat estate market Dawn Thomas

Buyers and Sellers: Horrors of the Real Estate Market

by The Dawn Thomas Team on November 5, 2013

This week we have a great article by Tara Nelson of Trulia entitled, 3 Hot Market Horrors – and How to Make Them Go Away. If you’re thinking about buying or selling in the Silicon Valley right now, or if you’re in the midst of trying to do so, there are a lot of horror stories out there. But if you have the right agent, there’s no need to worry about the following! Contact The Dawn Thomas Team if you want to avoid the following three horrors.
Horror #1. The Headless House Hunt(er)- ”When you’re constantly running into rising prices and multiple offers, it’s critical to be flexible with your house hunt wish list. But that flexibility sometime results in so many changes to your wish list that you end up feeling aimless, directionless, and like you are letting the market dictate what sort of home you can buy. And that’s not a great feeling, when what every buyer wants is to approach their house hunt with intention, direction and clarity on their wants and needs.
Before you start thinking about your house hunt in terms of specific neighborhoods, bedrooms and square footage, put pen to paper (or fingers to keyboard) and detail how you want to live in your next home. Touch on everything from:

• How you’ll get to work (examples: by car, public transport or working at home)
• How you’ll spend your spare time (examples: entertaining, doing DIY fixing, at the neighborhood yoga studio or wine bar)
• What sorts of activities you envision your family engaging in (examples: traveling the world, training the dog, skiing every weekend in winter and hiking in Summer)

Getting the big picture vision down on paper does two things. First, it creates strong clarity and direction about the more granular details of the homes that should fall within your search and also empowers your agent to suggest properties and neighborhoods that could fulfill this vision which you might not otherwise have gravitated toward.
Second, it creates a reference document that allows you to check in with your own gut once you’re in contract, minimizing buyer’s remorse and wayward, in-the-moment decision making.”
Horror #2. Hot Market, Cold Listing- ”8 times out of 10, a home that is taking much longer than similar listings to sell is overpriced.
Understanding that your home might be overpriced is simple. But understanding the comps and adjusting your price to hit the sweet spot of local buyers is more complex. That’s why you have an agent, who is happy and has the skills to a) help you understand local buyer demands, inventory levels, seasonal market dynamics and comparable sales data, and b) wrap all of these indicators into an appropriate pricing strategy.
And that’s why it’s important that you select a listing agent with a track record of selling homes in your area. If you’re horrified at the prospect of a price reduction, ask your agent to walk you through comps of recent listings with a history of price reductions in your neighborhood, exploring questions like:

• What price did they start at, and what price did they sell at?
• Where was the pricing sweet spot?
• What level of reductions were effective at getting homes sold?
• Which reductions were followed by a series of additional reductions before sale?

Fixating on the facts and figures around recently sold comps can help you make price reductions driven not by desperation, but by smart, data-driven strategy well-calculated to end the nightmare.”
Horror #3: A New Flavor of Stuck- ”A new conundrum begun to rear its ugly head, and it goes like this: the hotter the market, the easier it is to sell – but also, the more difficult it is to buy. If you stand to get dozens of offers on your home, and you’re aiming to buy an even bigger, better place in the same town or neighborhood, you could very well face the same level of buyer competition, bidding warfare and over-asking sale prices as you benefitted from on the “sell” side.
Fortunately, there are a few methods your agent can help you deploy to avoid this seller-side Catch 22:

• Seller contingencies- It is an increasingly common practice for sellers in hot markets to make their home’s sale contract contingent upon their ability to find and secure their next home. Talk with your agent about how this works and the advantages and disadvantages of seller contingencies.
• Buy first- Finances permitting, you might be able to actually buy your next home first. This is not without risk, as there’s never a 100% guarantee of what you’ll be able to sell your home for – or when you’ll be able to sell it. Have this conversation with your agent, as well as your mortgage broker, and tax or financial advisors.
• Seller rent-back- Selling first is the least financially risky option. But if you want or need to close escrow on your old home to get the cash for your new one, talk with your agent about negotiating a rent-back into your contract. A rent-back allows you to close escrow on your home’s sale, but rent it back for a few weeks or longer from your home’s buyer while escrow on your next home is closing.”

This blog is courtesy of The Dawn Thomas Team who is an award-winning Real Estate Agent team at Intero Real Estate Services in Los Altos 650-701-7822. We help nice people with selling and buying homes in the greater Silicon