Record low inventory, low interest rates and increasing buyer demand this spring is leading to a historic seller’s market. A balanced market is when there is between six and eight months worth of inventory. This means that if no new properties were listed, we would exhaust our inventory in the given time. This is known as the Absorption Rate.
Our current Absorbtion Rate in many areas is as low as 0.8 months. WOW!!! What does this mean for sellers? It means lots of showings and multiple offers are common. Within these offers, we have been seeing lots of incentives for sellers to accept the buyer’s offer, such as: above asking price, escalation clauses, appraisal gap guarantees, free occupancy (rent back) after closing, Netflix subscriptions for sellers (not kidding), and many more creative items.
Case in point… I listed a fantastic ranch home. We were swarmed with showings and had multiple offers within the first two days. I walked the sellers through all of the offers and highlighted the terms. In the end, we had two offers that were almost identical, I negotiated a couple items with the buyer’s agents, and the sellers accepted the one that was just slightly better for their needs.
What were the differentiators in the offers? Most of the offers we received had the biggies… sale price above asking (a couple WAY above); escalation clauses to increase offer price based on the highest offer received; appraisal gap guarantees; fast closing; free occupancy after closing; and limited scope of inspections.
In another case, I represented buyers who were first in to see a new listing. We scheduled a return visit the same day and wrote an offer that evening. The seller told us that they accepted our offer, because it contained all of the terms they were seeking. How did I know what was important to them? I called and talked to their agent before writing an offer.
If you are in the market as a buyer, make sure that your agent is aware of the current market conditions and that the agent has experience and excellent communication and negotiation skills. The agent you choose can make the difference between getting your offer accepted and losing out on multiple homes.
If you are looking to sell, the agent you choose can make a huge difference in your net return.
Contact me today to put my experience to work for you.