There are home buyers out in Northern Virginia but they are savvy, price sensitive and condition critical. As we have seen in the papers, read online, and heard on the news, the rest of the country is experiencing a double dip in home prices, and waves of foreclosures are going to hit the market spiraling prices even further. All of this has made buyers in our area become very cautious and has lowered consumer confidence nationwide.
Why do you ask are they this way? Well, most of them are from someplace else and they have seen streets riddled with real estate signs, are from areas that have a 41 month supply of houses versus our 3.1 month supply of houses or have friends and relatives who have been unable to sell their house in other parts of the country. This has an impact on their buying decision here and yes, they hear our area is different and understand the underlying reasons why our market is strong but they are still looking for “a deal”. They scrutinize each property looking for excuses not to buy them versus finding reasons to buy them. When there is a home that offers the right price (often below market) that has been staged (painted in neutral or trendy colors, new carpeting and de-cluttered), in perfect condition (no broken window seals, leaky faucets, etc.) and in a great location (backing to trees, end of cul-de-sac, etc.) they swarm on this property like vultures. Many times we will encounter multiple offers on these types of properties and see them escalate above list price.
If you are a seller and your home hasn’t sold, what should you do? Lower the price – it is the least common denominator and makes up for many areas where the home may be lacking such as in condition or location. Get the home staged, by a professional. You could also offer a higher commission to the buyer’s agent as an inducement to sell your house. Many sellers or listing agents are offering a lower commission as many buyer agents have accepted lower commission rates in the past few years as a result of short sales and foreclosures (banks) only paying a lower fee so paying more can set you apart from the competition. Be ready to negotiate to get your house sold.
If you are a buyer, what do you do? You should be ready to be in competition if you are looking for the perfect house at the perfect price and be prepared to include an escalation clause with your contract. As was mentioned early, these properties are typically seeing multiple offers that go above list price. Buy a new home – pick your own colors, location, and avoid the competition. Many builders have adjusted to the market and are priced to sell. Make an offer on an almost perfect house and see what happens. Often times, as homes stay on the market and sellers have many visitors with no contracts, they tend to be more reasonable with what the market is telling them in regards to pricing. The idea for buyers is to just buy. The housing affordability index hasn’t been this high since 1979! Interest rates are at their lowest level this year and prices are reasonable plus, we have jobs and stability in our market place.
If you need to sell, this is a great time to do so. If you are a buyer, you shouldn’t delay – prices and rates are not going to get lower in our area making this an opportunity of a lifetime. Contact your RE/MAX Gateway professional today and get packing!