Creating a viable and successful open house today requires some changes and pivoting to attract slowly changing buyer demand. It is becoming a bit more challenging to find that elusive and motivated purchaser with cash offers or who is qualified with a pre-approval from their lender.
The feedback that I am receiving lately is that a portion of cash buyers are thinking twice about putting their money into real estate for the time being and are stepping back and sitting on the sidelines. I believe this is occurring due to their thinking that either prices must come down to make it more affordable or worst case scenario, they might crash, reducing interest rates and providing an excellent opportunity for a better deal.
Also, saving for a larger down payment is another reason to wait. Creating a situation where the seller provides a short-term mortgage at a reasonable rate, saving the buyer money on bank fees, and earning the seller above average interest would be a positive step; it would pay capital gains, if any, stretched out over the term of the mortgage instead of one lump sum. This would be a win/win solution for both buyer and seller. However, if you are an investor, you are searching for other markets that make “more sense in the brain and cents in the pocketbook”© to provide a better return on investment.
But as I have stated in the past, the inventory is so low that no bubble exists and I do not see prices crashing in the Long Island area but moderating slightly. More important, prices have increased substantially over the last two years mainly due to the historically low-interest rates and the effect of our pandemic on working individuals and families. This has created greater demand as people exited the most populated cities around the U.S. for the suburbs, creating a work-at-home environment for millions of families and flooding local housing markets as urbanites sought more comfortable, safer, and leisurely space.
This had caused FOMO (fear of missing out) and in many instances created bidding wars for the limited inventory, raising prices to never-before unheard-of levels. Hopefully, those individuals will be in their homes for a longer period of time and will continue to have gainful employment with adequate raises and/or a business that continues to be profitable.
In order to search out and locate those buyers for your home today, you need to hire a knowledgeable, well-informed expert Realtor with a long-term record of many years in the industry. In order to sell, it will be necessary to think “outside the box” with cutting-edge ideas and concepts to attract buyers who are still in the market looking for a home, HOA, Condo, or co-op. Most important and crucial is to look at your home as if you are a purchaser and then determine as a seller, what you will need to do to provide the condition, appearance, and value that would enable that buyer to consider your property.
How does the exterior look? Is your shrubbery overgrown and in need of pruning and shaping? Is the lack of color and landscaping in the front taking away from the curb appeal? Need a paint job? Roof looking worn? etc. Homeowners must identify those items that should be fixed and then decide to address those issues upfront to avoid large costs down the road.
How does your interior appear? Have you reduced all your clutter? Does it need a paint job? How are the floors? Are the kitchen appliances in working order or in need of replacement? Are your bathrooms in excellent or poor condition? You may have a limited budget, so do the repairs first and then replace those items that are most important, e.g. appliances and fixtures.
Don’t spend any money on major renovations as you probably will not get your money back. When selling in an “as is” condition, then one must be cognizant that when the buyer has an inspection, they will be subtracting those costs from their offer and possibly more than it could have cost to repair them if done beforehand.
Moreover, and what will be tantamount to attracting more buyers and receiving offers today, is to aggressively price your home to create more viewings that lead to offers. You can then determine which offer is the most solid to get you to the closing table. As I have said earlier, pricing it a bit below the market doesn’t mean you have to accept a low offer or even the first offer, but it will bring you more interested purchasers and just maybe create some buyer emotion leading to a possible bidding war.
The homes that haven’t sold currently and in the past are most likely overvalued. Part of the issue is that homeowners have gotten unrealistic about their home’s value and somehow rely on certain websites and Zestimates in creating a value that is greater than what the buying audience is willing to pay. Don’t think the “big fish” buyer is still out there but hasn’t yet surfaced. This is no longer a prudent and smart way to think.
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