How to Move With the Heartbeat of Your Local Real Estate Market
There are International Real Estate Markets, National Real Estate Markets, Local Real Estate Markets and even drilled down to your local neighborhood market. All created by supply and demand. Today’s spotlight is on your local markets.
What can you do to be effective in any Real Estate transaction; to sell the home you want to sell or buy the home you want to buy? Knowing your local market is your first step and where we’ll zoom in for today’s weave of Real Estate Market know how. What’s the buzz in your market, do you know?!
Different strokes for different folks. Different Markets require different methods.
Whether you live in my Real Estate market of Southeast Florida or across the state on the west coast of Florida or anywhere nationwide, you’ll find 3 basic markets. Knowing your local Real Estate market and how to move with it, will determine the success of your Real Estate transaction.
Your success will depend upon your Real Estate Agent’s knowledge of their local market. So step one is to make sure the Agent you hire is knowledgeable in their local market. Make sure you ask them what market your city is experiencing. Don’t be afraid to ask them. Ask away. They should be able to clearly explain to you the below market types. If they can’t answer, you’ll want to keep searching for a Real Estate Agent who is best equipped to help you sell a home or buy a home.
The different markets will determine who has the most say in the outcome of the home sale, typically; the Seller or Buyer and I’ll discuss how to move to win in your particular local market. Let’s find out how to move with it.
Whose heart is beating fastest?
In a Seller’s Market, it’s the home Seller whose heart is beating the fastest.
A Seller’s Market is when the supply of homes is not great enough to keep up with the demands of home Buyers. There simply aren’t enough homes for sale. Typical Seller’s Markets have less than 5 months of an available inventory of homes from which Buyers can select from. At any particular time, it measures that if no additional homes were listed for sale, it would take anywhere from 1 day to less than 5 months to sell the homes currently listed for sale.
Sellers are excited in a Seller’s Market, particularly with the thought of being able to sell their home quickly and at or above their home’s list price as home prices are pushed higher! This certainly makes Seller’s hearts beat fast – they’re excited!
In fact, did you know that when someone is excited their heart beats over 100 beats per minute? I discovered this interesting fact from Cleveland Clinic reporting.
It’s a time when Real Estate Agents who specialize in representing home Sellers, know that if they secure a new home to sell that has been prepared well and priced right that there’s a very good chance that their Seller’s home will grab the attention of many, prospective home Buyers. The new home showcased can bring in multiple Buyer interest where Sellers can find their home often receiving multiple offers increasing the home’s sales price.
By no means, does this mean that a Seller won’t have to do anything to get their home ready to sell and that the list price doesn’t matter, as the important principles of Real Estate will always matter no matter what the market may be. Sellers will always need to prepare their home before selling and they will always need to price their home correctly if they hope to sell their home quickly and for the most money. The difference in a Seller’s Market is that their chances to sell for at or above list price is at it’s greatest and to be done in the shortest amount of time.
A Seller will find that they will have less to have to “give up” during the home sale when it comes to the Buyer’s offer, inspections and any negotiations. They are the one who rules the roost.
What do Buyers need to do in a Seller’s Market?
What do you do if you’re a Buyer in a Seller’s Market? Because supply is limited in a Seller’s Market, Buyers will need to be well prepared. There are a number of matters that they’ll want to make sure they plan for that include these 4 all important ways:
- Obtain a Pre Approval for a mortgage BEFORE you even consider stepping out to see a home.
Although this is always recommended before starting any home search, it’s even more crucial during a Seller’s Market.
Because Buyers will likely be competing with many other home Buyers, Buyers will need to find out every way in which to let a home Seller know that they’re ready, willing and financially able to buy their home. We’re not talking about a letter that the Buyer’s local bank drew up after a brief telephone conversation. This Pre Approval letter will indicate that the Buyer provided their financial documents such as bank statements and pay stubs, along with their most recent tax returns and their credit report was reviewed. Only after a thorough review of these items by a Lender can a determination of their financial ability be confirmed with the greatest of confidence. This does not guarantee that a Buyer will secure a loan, but it’s the best evidence of a Buyer’s ability early on.
No Pre Approval letter, no home search.
- Make sure their offer is well positioned against other Buyers.
This is completed by ensuring the Real Estate purchase contract is completed with no errors, including all pages with initials/signatures and required addendum’s, offering shorter time frames than the standard longest time frames for all contract contingencies, such as inspection and loan commitment periods and making sure to offer a larger escrow deposit that will show that a Buyer is serious about buying the home. And also, it’s a must to offer the most money according to the home’s value. Offering above list price is even a consideration, as long as it’s within range of the home’s market value. It will still have to appraise for the value of the purchase contract that is determined later after a contract is executed.
Now is not the time to save a buck on a home that a Buyer really likes, because in a Seller’s Market there will certainly be another Buyer who will present their offer as recommended above and win the home.
It usually happens that after a losing a few homes a Buyer will come around and follow the advice above.
- Do not be nit-picky
If an inspection reveals a number of small issues don’t try to bicker with the Seller in hopes of getting a price reduction or a repair credit. Do Buyers really want to lose a home they like over GFCI outlets that need to be installed or a leak under the Kitchen sink or a toilet that is running, or a few cracks in the decorative pool tiles. These are items that can all be fixed by a Buyer without having to rob a bank and certainly aren’t worth the risk of losing a home because a Buyer decided to ask for a repair credit for these items, just to try and be in control.
Unless a Buyer is looking for a less than desirable home, being nit-picky on an offer will get you nowhere other than back out looking and waiting for a new home to come to market.
- It’s best to refrain from asking for help with closing costs
You’ll often find that Buyers will ask the Seller for help in paying for the Buyer’s closing costs and other prepaid items, such as their homeowner’s insurance that is paid at closing. When a Seller agrees to pay this money it is simply coming away from what they’ll be netting from the sale of their home. If a Buyer offers $350,000 for the Seller’s home and then asks for a 3% Seller contribution, the net dollar amount to the Seller for the sale of their home is actually $339,500. (not including the Seller’s other closing costs).
A likely scenario will come from a competing Buyer that offers $350,000 but no help with closing costs when this Buyer better understands a Seller’s Market.
If a Buyer NEEDS the help with closing costs then it’s best that they ADD the money that they need for closing costs to the purchase price so the Seller will net the $350,000. This way the Buyer is simply financing the help they need with the closing costs. This allows this Buyer to compete with the Buyer that doesn’t need the help with closing costs and can make their offer superior in other ways such as those described above.
In a Balanced Market, you won’t find one party favored over another
While hearts may likely be beating with the excitement of selling a home or buying a home, it won’t be beating faster for having a leg up on the other party to the Real Estate sale. The Market is balanced. Smack dab in the middle when it comes to supply and demand. There seems to be enough homes for sale without the detriment to another. You’ll find an inventory level of homes at a 5 to 6 month supply. Battle lines are blurred during a Balanced Market.
In a Buyer’s Market, it’s the home Buyer whose heart is beating the fastest
As a Seller in a Buyer’s Market, the tables have turned from what they were experiencing in a Seller’s Market. Now, it’s the Buyers that are excited from all the inventory of homes they have to choose from. How exciting, so many homes to choose from. Perhaps they’ll be able to find most of what’s on their wish list in a home.
Sellers really need to sharpen their home selling plan now and I mean sharpen. They’ve just realized that they need to make their home shine above their neighbor’s home; the competition. They need to show all of these home Buyers that their home will be the best for them to buy. How do they do it? It involves 5 all important ways:
- They’ll need to plan very well for their home sale that includes accurate pricing.
- They’ll need to not fret about the small stuff
- They’ll need to practice give and take; the practice of compromise
- They’ll need to hire a Real Estate Agent that is a master at marketing online.
- They need to be remarkable!
What do Buyers need to do in a Buyer’s Market?
Music to a Buyer’s ear as their heart beats rapidly; a Buyer’s market. A Buyer is now ruling the roost. Homes for sale are in excess and Buyers are carefully picking out a home they like. No longer are homes in limited supply as seen in a Seller’s Market, but rather homes for sale are plentiful. Where did they all come from as Buyer’s delight in the selection. The level of inventory is now at 6 months or more. If no additional homes were listed for sale, the current inventory would take 6 months or more to sell. That’s an eternity for a home Seller and they’re going to be willing to negotiate if their home isn’t selling.
Buyers can anticipate a lot more of their needs to be met. Buyers now can pick and choose what best fits their needs. They now feel the power to ask a Seller to fix those little items that showed up on the inspection report that they were fearful of asking for in a Seller’s market. They can easily ask for a Seller to contribute towards their closing costs, after all to have some money leftover to buy some new furniture for the home would be ideal.
The ways in which you move with your local Real Estate market can make all the difference in whether or not you accomplish what it is you set out to do when it’s time to a sell a home or buy a home. As you can see there’s a lot to consider. Now that you’ve educated yourself on the various types of local markets, be sure to get in touch with your market and have a Real Estate professional to guide you through the process in order to avoid too much frustration, loss of money and time.
Whatever you’ve set out to do in life I’m sure you’ve always found that when you have direction, your chances for success are that much greater.
Follow these recommended courses of action and feel your heart beats 100 times a minute with excitement from your new discoveries in home selling and home buying!
Additional Resources to help you move with your local Real Estate Market:
Analyzing the Real Estate Market from The Bigger Pockets Blog
Real Estate Agents misleading on market values from the Maximum Real Estate Exposure Blog
Buying a home is a Seller’s Market from Rochester Real Estate Blog
Book an appointment now to learn more about your local Real Estate Market in Southeast Florida. Call/Text Lynn at 954-464-1100 or email Lynn at LynnP@ImagineYourHouse.com
Today’s article “How to Move With the Heartbeat of Your Local Real Estate Market” written by Lynn Pineda. You’ll find Lynn selling homes in Southeast Florida in the cities of Coral Springs, Parkland, Margate, Tamarac, Coconut Creek, Boynton Beach, Delray Beach, Boca Raton, Sunrise, Plantation, Ft Lauderdale, Pembroke Pines and Miramar areas within Broward and Palm Beach counties.
Lynn Pineda, a licensed Southeast Florida Real Estate Agent serving Coral Springs Florida and surrounding Southeast Florida. Keller Williams Coral Springs Realty. June 4, 2015. Real Estate Promises Delivered. You can speak with Lynn by calling/texting her at 954-464-1100 or you can email her at: LynnP@ImagineYourHouse.com if you need to buy or sell a Southeast Florida home. Your local, trusted professional when it’s time to buy or sell a home. Real Estate promises delivered.