A good friend of mine listed and sold their home this past year and became renters. The reason? They couldn’t find anything to buy, home inventory is too tight.
With two teenage boys and thriving careers, they had hoped to transition into a home much bigger and better than the one they had just sold. School districts and proximity to their job limited their search even more. Their home sold quickly, but due to lack of home inventory there was nothing to buy.
According to HouseHunt’s 2nd Quarter Market Condition Report in 2016, there is only a slight increase in home prices and the supply of new listings on the market is reported as tight in almost every metropolitan area across the US. Even more limited is the supply of homes for those looking to sell their home and trade up. A report by Trulia shows home inventory on trade up homes were down 41% and premium home inventory dropped 33.4% from 2012 to 2016. That’s enough to make the Jefferson’s wonder if moving on up is a good idea in this market.
Despite wanting to sell, tight home inventory supply could be keeping many of you from letting go of your home. No need to worry though, it’s still a good time to sell. So if you are in fear that this will happen to you, there are a couple of things you can do to confidently make your move:
•Hire a good real estate agent
In a market with low inventory, not having a good agent is like going to trial without a lawyer. Low inventory means greater competition and requires an agent who knows the area and is able to locate the right home and negotiate on your behalf.
•Communicate in specifics
Discuss your concerns with your real estate agent and make sure you relay details that matter the most to you such as:
-size/square footage
-number of bedrooms
-number of bathrooms
-features you can’t live without
-features you are flexible with
-school districts
-locations /neighborhoods.
•Know what your home is worth
When you are selling your home to purchase the new one, it helps to know what you have to invest in the move up. The best way to get the value of your home is from a local community expert, but there are also some online resources you can use to get an accurate range of values. MoveUp.com is a great resource for home values and offers other tools helpful when you are thinking about selling.
•Be proactive
Jim Droz, Century 21’s former #1 Agent in the World, worked in a luxury market on the Central Coast of California and had a creative approach to finding a home for buyers in a low inventory market. He would send out a letter to homeowners that matched the criteria of his homebuyers. He’d let them know he had clients ready to make an offer on a home like theirs and asked if they would considered selling. He often found that many people were much more open to selling their home using this method. This practice has the potential to open up a few more homes if your real estate agent is on board.
•Negotiate more time
Your agent can ask the buyer to extend the time before closing, but with mortgage timelines today your buyer may prefer to close on time. If they aren’t willing to extend, you may be able to rent back your home for 30 days after the sale if you haven’t found your next home yet.
•Be Flexible
Sometimes being flexible opens the doors to more inventory. Do your research and make sure you aren’t overlooking cities, neighborhoods, and school districts that could be a better choice for your household.
•Be Eager to please
When you do find a home, consider being less of contingency king/queen and consider how to make your offer more attractive. You don’t want to lose a good opportunity by making too low of an offer. Perhaps even consider putting down a larger earnest money deposit if you feel confident you won’t be backing out of the purchase.
•Be alert and ready
The last thing you want to do is let a missed opportunity slip through your fingertips. Search for homes online that match your criteria and be available to view the home and to make decisions during offer time.
Don’t stress yourself out over any reason that has kept you on the fence. When it’s the right time for you and your family to make a move, then that’s better than most reasons against it. My friend did find a beautiful home just two months later and yes, they lived happily ever after.
•Add a contingency condition
For your protection, you can have your agent write a contingency condition into the contract that states that the seller must find a home to move into before the buyer moves in.
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