Yes, It is a Seller's Market but You Can Prevail

By
Real Estate Agent with Long and Foster REALTORS (703) 470-4545 0225085927


Statistically, it is pretty much a seller's market across the country. 

Generally, if an area has less than six months' inventory on the market, it's a seller's market.

In our Northern Virginia market, we're looking at 2 - 2.5 months of inventory.  And in certain neighborhoods in certain areas, there is far less.  In fact, in certain pockets in certain price points, you can expect multiple offers, escalation clauses and offers waiving home inspection and appraisal contingencies. 

In Alexandria, VA in June 2018, we averaged 1.9 months of housing supply, down from the five year average of 2.5 months.  

 

Even if you are lucky enough to get a property under contract, you will find that sellers usually know they are holding the upper hand and they'll hold firm on not making home inspection repairs. At least, they won't put up with being nickled and dimed, although a major repair will typically get their attention as they know it is going to continue coming up as an issue.

Now, of course, not every house is going to be priced properly from the beginning, nor is every house going to be the condition or location to appeal to the widest pool of buyers, so even in a seller's market, there is the opportunity to negotiate.  

So, what's a well qualified, serious buyer to do in this type of market?

First of all, understand the environment in which you are competing.  For example, take the very popular zip code 22301, which encompasses the Rosemont/Del Ray area, which presently has 1.3 months of inventory.  Clearly, you'll be facing plenty of competition there. 

In all likelihood, if you are writing an offer on a property in this particular area of Alexandria or any of the surrounding neighborhoods, to be honest,  you will be facing competition and that means:

  • Escalation clausses
  • Offers with no contingencies for appraisal or home inspection

I'll be honest, it's not always easy.  I had a client lose out on the perfect house just a couple of weeks ago because even though she had a picture perfect offer - escalation clause, solid approval letter, significant down payment,  with a home inspection for informational purposes only - and even though the listing agent said we would have beat out 5 other offers, at the end of the day, we could not give up the appraisal contingency so the sellers took an offer without an appraisal contingency.  The sales price was a few thousand dollars lower than what we offered, but the sellers felt "bird in hand" was the safer option than risking an offer where the property may not appraise. 

That's not to say that the average mortal cannot buy a house in Alexandria without throwing caution to the wind and giving up all protections buyers normally have.  No, not all...while it may not be possible to buy just ANY house on the market, no matter how sound your financing or how good your offer, there IS a house out there for you and with enough perseverence and realism, you will prevail.

It is critical, though, that you are prepared:

  • Strong preapproval letter from your lender;  and we're not talking internet pre-qual, we are talking a preapproval letter from a local lender who has verified credit, income, assets, and looked at documentation.  And he needs to not hesitate at getting on the phone and pitching your offer to the listing agent - often that extra vote of assurance can make all the difference. Be sure your lender is YOUR advocate.  They are not all created equally. 
  • Think about what terms you are comfortable offering:  can you live with a home inspection only for informational purposes?  You can still void the contract, just not ask for any repairs. 
  • If you have a substantial down payment and the house doesn't appraise for the sales amount, would you be willing to come to the table with the difference?  If so, you can waive the appraisal contingency.
  • Post settlement occupancy for the sellers?  Normally we never advise on doing these, but sometimes desperate times call for desperate measures.  It's just one more thing to consider putting in your arsenal.
  • Escalation clause.  There is some controversy about escalation clauses because if not used properly, they can backfire.  Some clients think they are a license to make a low offer initially, escalating if another offer comes in.  And some sellers take offense at that because it's like waving a flag that says "I don't want to pay you what you want for your house, but if I am forced to, I can go higher."  In other cases, they are the norm, but they really need to start at least at list price or above.  If you know you're facing competition, why risk offending the seller;  put your best foot forward and then add something to sweeten the offer. 
  • Think about the houses that have lingered a little longer on the market.  Sure, you would prefer something move in ready and with all the latest updates, but could you make something else work? 

Sure, it's tough out there some days and a strong, robust seller's market can wear you out.  We get it.  It can be emotionally taxing and more than once, you'll be tempted to just give up the search.  But, no worries, you will eventually prevail and move into the house you always wanted. 

It may take a little longer than you expect and may be tougher than you want, but it can be done.

You just gotta have faith and a little patience. 

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Home Buying
Groups:
EXPRESS WITH WORDS AT ACTIVERAIN
Bananatude
Bartender, Make it a Double
Old Farts Club
Tags:
home buying alexandria va
buyers agent alexandria va

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Ambassador
3,779,657
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Susan- this is excellent!  First, make sure you have the very best agent you can and follow these tips. You have to be ready, be prepared, and be willing to ater what it is you really need. 

Jul 24, 2018 03:41 PM #4
Rainmaker
3,765,839
Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Good evening Susan Haughton,

Glad to see this post featured! Your points have lots of merit.  In a hot sellers market it's important to have a knowledgeable skilled agent writing a buyers offer!

Jul 24, 2018 03:42 PM #5
Rainmaker
3,977,717
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

Buyers with a strong clean contract will see results in their offers

Jul 24, 2018 03:55 PM #6
Ambassador
3,917,785
Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

Hi Susan

This is so well done, with great advice and guidance for concerned buyers in a seller's market. There are never any guarantees, but there are definitely some things buyers do that can sabotage their offers, as well as some ways to maximize the chances of success. Congrats on a well deserved feature.

Jeff

Jul 24, 2018 04:05 PM #7
Rainmaker
2,426,097
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

As a listing agent I go out of my way to play fair & just even if market is mine

Jul 24, 2018 04:59 PM #8
Rainmaker
1,738,780
Lottie Kendall
Compass - San Francisco, CA
Helping make your real estate dreams a reality

Nice tips for buyers  so they can succeed in hot sellers' markets. 

Jul 24, 2018 06:45 PM #10
Rainmaker
3,177,402
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Susan if buyers and agents listen to good sage advice they will prevail, and needless to say having been through a few buyers and sellers market I can say this is good advice, Endre

Jul 24, 2018 11:04 PM #11
Rainmaker
1,280,566
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Excellent post, Susan!  "Throwing caution to the wind" is what I worry about buyers doing in a market like this.  It's imperative to work with an agent, like you, who knows how to give them the protection they need and still have a reasonable chance of getting their offer accepted.   Thanks for the post.

Jul 25, 2018 04:08 AM #12
Rainmaker
497,435
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

Waiving the appraisal contingency and inspections clause...some buyers do that here but I never recommend it.  I feel in a few years, when the market crashes, prices fall and today's buyers want to sell--they will not be happy when they have very little or no equity in their homes.

Jul 25, 2018 05:54 AM #13
Rainmaker
2,189,295
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

We have buyers in Sacramento who waive the appraisal contingency and then get the appraisal completed under the timeframe for inspections. They don't tell you they are canceling over the appraisal, they say it is inspections, but it is the appraisal. Which is dishonest and some day they will get caught.

Jul 25, 2018 01:03 PM #14
Rainmaker
527,231
Karen Feltman
Cedar Rapids/Iowa City, IA KW Legacy Group - Cedar Rapids, IA
Relocation Specialist in Cedar Rapids, Iowa

I think that if you are waiving the inspection clause or the appraisal contingency in an effort to win a multiple offer situation, as an agent, it would be wise to have your buyers sign a hold harmless agreement.  If you as an agent are advising this as a negotiation strategy, you need to be very careful.  It is a lawsuit waiting to happen.  We have a document that states that we recommend inspections and appraisal contingencies and if the buyer chooses to waive these contingencies, it is their decision and they have been counseled.  Too many things can go wrong.

Jul 25, 2018 05:11 PM #15
Rainmaker
1,963,303
Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Southlake, TX
Selling Homes Changing Lives

Susan Haughton - The market seems to be shifting here in the DFW area of Texas. I'm not seeing multiple offers any more. We were in that state of multiples for many years.

Great news for sellers in other parts of the country. 

Jul 26, 2018 05:39 AM #17
Rainer
6,002
Jake Donnelly
Liberty Home Mortgage - Independence, OH
Jake The Mortgage Guy - 440-781-8808

Great info. You are right on alot of items. I love smart people!

Jul 26, 2018 07:21 AM #18
Rainmaker
1,273,642
Wayne and Jean Marie Zuhl
Samsel & Associates - Clark, NJ
The Last Names You'll Ever Need in Real Estate

As listing agents, we are having a tough time keeping anything in inventory!

Jul 26, 2018 09:00 AM #19
Rainmaker
784,879
Kevin Mackessy
Blue Olive Properties, LLC - Highlands Ranch, CO
Dedicated. Qualified. Local.

We have beaten out some offers before, that were higher, because we did most of the things you have detailed here.  Another great step is to call the listing agent before you submit your offer.  Many people submit and then cross their fingers, without doing anything else.  Calling the listing agent gets you in front of them and makes them remember your offer in the pile they are likely to receive.  

Jul 26, 2018 11:14 AM #20
Ambassador
3,045,591
Paul S. Henderson, REALTOR®, CRS
RE/MAX Northwest. - Tacoma, WA
Tacoma Washington Agent/Broker & Market Authority!

I think it is fun to find a method to reach prospective clients Susan. I enjoyed your metered approach!

Jul 26, 2018 10:55 PM #21
Ambassador
1,808,538
Debb Janes EcoBroker and Bernie Stea JD
ViewHomes of Clark County - Nature As Neighbors - Camas, WA
REALTORS® in Clark County, WA

If a lender is involved, getting a call to reassure the listing agent the buyers' are strong is a great strategy. We just had it happen in a multiple offer situation, and they sellers chose those buyers because of the call. I'm in complete agreement with your great list and tips 

Jul 29, 2018 07:32 AM #23
Rainmaker
573,867
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

It is a sellers market throughout most of the country so buyers need to put their best offer forward. Escalation clauses are not frequently used in my market, in fact I haven't seen them used at all, but it's definitely something to add to my arsenal.

Jul 29, 2018 09:44 AM #24
Rainer
131,520
Anne Corbin
Long and Foster - Lake Anna - Spotsylvania, VA
Serving Lake Anna & Central Virginia

What a lovely article. I agree that we have to help our clients put on a GREAT sales pitch to get our offer at the front of the pack.

Jul 31, 2018 12:30 PM #25
Rainmaker
1,963,303
Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Southlake, TX
Selling Homes Changing Lives

Susan Haughton - It has been a strong sellers market and many sellers have reaped rewards. Things have slowed down here now it's November. In my area. I haven't seen a shift to a buyer's market here yet. Have you?

Nov 05, 2018 03:34 PM #26
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
1,026,918

Susan Haughton

Susan & Mindy Team...Honesty. Integrity. Results.
Are You Ready to Make a Move? Call me!
*
*
*
*
Spam prevention