Seller’s needed! Spring 2013 real estate market continues to get hotter as Buyers and Agents search and scramble to find homes. Scott MacDonald offers current Northern Virginia market data and housing statistics. Want to know how this could impact you? Give Scott a call (703) 652-5777 – He’s never too busy to discuss the real estate market! scottymacsblog.com
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Cold Weather Isn’t Cooling Down this Real Estate Market… Multiple Offers are HOT!
Scott MacDonald advises again on multiple offers, contract situations, as well as, short sale scenarios in Northern Virginia. As the Spring real estate market starts to heat up, don’t let Buyers grow cold. Read more Seller & Buyer strategies or give Scott a call to discuss (703) 652-5777
Multiple Offer Strategies In Real Estate: Help For Home Buyers
It is no surprise that we are seeing more and more multiple contract situations. The perfect storm is in place – interest rates are at 65 year lows, inventory levels are at extremely low levels, and there are buyers anxious to get into houses. Affordability levels are near all-time highs as well so it only makes sense that buyers are finding themselves competing to get into a home today.
So, the question is how do you win and get the home your client’s desire?
- Add an escalation clause which allows you to bid up the price above any other offer up to an amount you are comfortable paying. The escalation amount should be an interesting number like $1,150 as most people just do $500 or $1,000 – make your offer stand out.
- Increase your earnest money deposit to show your interest in purchasing the house. If your down payment is 20%, make your deposit 10%. If you are doing FHA, have your deposit equal your down payment of 3.5%. You are going to be putting the money down anyway, why not do this and attract more attention to your offer?
- Have a very short time frame on your home inspection contingency and radon contingency if you choose to have them. Also, consider doing the inspection contingencies for informational purposes only just leaving yourself the opportunity to void if you find something so egregious or beyond what you expected. If you and your agent are confident in the home’s condition, you may want to consider eliminating these contingencies but be extremely cautious when not exercising these contingencies.
- Have a quick settlement date – Ashley Smith with Atlantic Coast Mortgage can close a loan in just 8 days if she has a complete loan application from her clients.
- Additionally, encourage your loan officer to be proactive and call the listing agent and explain the financial arrangements and status of the loan. Pat Cunningham of Home Savings and Trust was one of the first lenders to mention he was doing this for his clients.
- Allow the seller to rent back after closing giving them flexibility on when they need to move or to give them time to find a home.
- Put in a home of choice contingency for the sellers if they have not found a home yet – make the contingency for an extended period of time so they have the opportunity to find the house they really want.
- If you are so bold, you can have the clients waive the appraisal contingency. In order to do this, you need to work in conjunction with your lender and see if they can get a quick turnaround on the appraisal. If so, have the appraisal done in concert with the home inspection contingency and if it doesn’t appraise, you can void based upon the home inspection or on the HOA/condo documents. Not one of my favorite suggestions but it is a strategy you can undertake to help your contract win. Also, if your lender can get a quick turnaround, make the appraisal contingency 5 or 7 days.
- If you are dealing with a home owner and not a bank or investor, have your clients write a letter along with photos explaining why the house is so important to them and the trials and tribulations of their home buying experience. It can sometimes help to pull on the heart strings of the owners.
- You can explain to the listing agent, the highest contract isn’t always the best contract. You need to have the right people in place to consummate the transaction not just someone willing to throw a high number just to get the house to only experience remorse later and back out of the contract.
These tips will help you win more contracts. Consult with the clients and make sure they are comfortable with your recommendations prior to implementing them so they fully understand the repercussions of their actions. Get it? Got it? Good!
Now, go sell something!
NOVA Real Estate 2012 -All that Glitter & Shines
Happy Holidays!
What a year it has been in real estate. Sales were better than expected, mortgage rates went lower than expected and inventory levels have dropped substantially. As a result, most of the year I felt like a broken record stating how low inventory levels were in our area, how low interest rates were and what a great time it was to be a seller as a result of these elements. Also, I often commented on how prices had stabilized and were even increasing which made it an optimal time to buy coupled with the low interest rates. This month will be no different except that inventory is even lower and rates have come down even more. Crazy but true.
The question is – what will happen next. I am about to unveil my Top Ten Predictions for 2013 so you will have to wait and find out. It is an annual video and blog that I have been doing over the last several years. As is the case with most prognosticators, I am right sometimes and way off on others, I get razzed and complimented. We start with the year in review and how I did with my predictions then go into the next year. I am looking forward to your reviews and comments.
In the meantime, be safe, relax, spend time with the family and enjoy your holidays. If you ever need anything or have any questions, feel free to reach out to me. (703)652-5777
All the best –
Shock and awe…
The real estate market continues to be white hot for sellers who properly price their homes, get them in the right condition and have them staged. This makes it very competitive for buyers. We see multiple contracts on houses in all price ranges so buyers need to be prepared to be involved in situations like this and put their best foot forward when making their offer. We have been saying this for several months now and we do not see that this will change anytime soon.
There is one area that continues to shock and amaze me today and that is 
interest rates. It is an unbelievable phenomenon watching interest rates today. Who would have ever thought mortgage rates could be as low as they are today taking into consideration where we have been since the Mortgage Banker’s Association started tracking rates. Remember what happened in the early 80’s with rates at all-time highs in 18-19% range and even when I got into the business in 1988 rates were between 10 and 11%. We got excited when the rates were creeping below 10%. Then we watched as rates came down into the 6’s and thought they couldn’t go lower and they have. This week I saw a 30 year fixed interest rate at 3.5% with a lender credit. There was even an article asking if rates could go down to 3%. There has never been a better time to purchase a home, investment property or even refinance your existing mortgage(s). Please let us know how we can help you.
Summertime market…it’s gonna be fun!
The spring real estate market is hopping along as we enter the summertime “fun in the sun” buying and selling season. Our inventory levels remain very low for this time of year – we actually have seen inventory levels on the decline in recent weeks. Multiple contract situations are more the norm than the anomaly, which can be frustrating for buyers. Prices have stabilized but we need to see them increase to help out people in the area that are still underwater with their house values. Although we have people still underwater on their houses, distressed property inventory remains very low – only 11% of all inventory consists of short sales and foreclosures.
The big news this month seems to be the rise in consumer confidence in our area compared with the rest of the country. My feeling is people are becoming more optimistic in Northern Virginia because we have jobs and our housing market is strong. We have a 1.5 month’s supply of resale properties and a 1.1 month’s supply of rental properties. People are not only out looking at properties but they are actually buying houses. Agents are working hard and diligently working on listings and contracts. The environment around the office is fast paced and optimistic as the agents are busy helping our clients buy and sell houses. Our lenders and title partners are expressing a lot of the same sentiments with the market and its activity. In addition, there is a lot of “good” publicity surrounding the real estate market which is a welcomed reprieve from the last several years of nothing but negative news. All of this information will propel us into the summertime selling season so if you are looking at your options with real estate, give us a call.
Is the spring market coming?
In Northern Virginia our inventory levels of active resale homes for sale continues to decline. We are down to just over 4,600 homes on the market and we have a 1.8 month supply of homes. Houses that went under contract the last 7 days hit a 6 month high this past week. In a nutshell, houses are selling. Why is this happening? Interest rates hit another record low, we are creating jobs here, rental rates are increasing and our population is growing putting more demand on housing.
Last week I was asked when will we see the spring market or in other words, when will more houses be coming on the market? Some people say when the banks start releasing foreclosures, some say mid-March, and some say when their price rise. Let’s analyze each of these responses.
So far we have not seen the foreclosures hit the market and as a matter of record, the inventory has actually decreased to a 6 month low with only 311 currently for sale. In addition, “Notice of Trustee sales” published have actually remained very low as well averaging only 3 pages per day versus substantially higher numbers in 2008-2010. Lastly, I started tracking short sale inventory just over 2 years ago and we are at an all-time low in this area as well – only 651 are for sale in Northern Virginia.
As far as the inventory levels increasing in mid-March, only time will tell but several agents have indicated they have houses in the process of being prepared to go on the market around this timeframe. If they are not only preparing them for sale but are going to price them accordingly, they will sell. Two properties we listed on Friday received multiple offers because they were price properly and in the right condition. And now for the statement, “when my price increases, I will sell” is a tougher one to answer for many people. Rise compared to what? When they were purchased? Compared to 2004-2007 prices? Compared with the last sale in their neighborhood? Until these questions can be answered, we can’t help them.
We continue to have one of the best real estate markets in the country and it will be this way for the foreseeable future. Please feel free to contact us to learn more about how this market affects you and your situation.
Scott's Motivation and Real Estate Market Updates 