In the olden days (maybe just a few years ago) homes for sale in the Chicago North Shore suburbs were plentiful and took a long time to sell. "Long time"meaning it was a buyer's market with homes generally taking longer than six months to sell. We are now experiencing a seller's market with the median sell time around three months. But most homes are selling more quickly.
In a corona virus world where everything has gone tipsy-turvy the real estate market rebounded spectacularly. Currently (March 2021) inventory is low throughout Winnetka, Wilmette, Kenilworth, Glencoe, and Northfield. Homes are selling within days of hitting the market, and in some cases, well before they become available on the Multiple Listing Service. Hot homes see frequent multiple offers.
The real estate market exploded in early June of 2020. After several months of home isolation the country eased up a little and the flood gates opened with motivated buyers. Who were these buyers?
Buyers leaving their city condos and townhouses for larger suburban homes and gardens because coronavirus changed their professional situation
Buyers leaving the city due to needing more space for children to play outdoors in case of another virus incident
Buyers leaving the city due to safety fears.
Sellers being reluctant to list their homes because of coronavirus
WHAT BUYERS NEED TO KNOW IN A TIGHT MARKET
- With homes selling quickly or before they are online, make sure your agent is checking every available source for listings. Changes in MLS rules mean that homes that are not publicly listed must be listed privately in the MLS and can often be shown and bought. Expect to pay asking price or close to it.
- Cash offers are the gold standard but if that's not a possibility then absolutely be pre-approved. Your lender will be able to provide a letter to include with your offer.
- Also know that the local purchase contract allows for two types of cash offers: one with a financing option and one without. The former says you will be securing a loan but won't require a contingency. The latter means that you have cash to cover the cost of the home (and you will provide a statement from your bank or financial adviser.)
- Do not, ever, skip the home inspection to improve your chances of buying the home. You could, in the right circumstance, offer to buy it "AS IS" but still conduct the home inspection and accept responsibility for items that need repairing. If the home turns out to be a money pit, you'll most likely be able to cancel the contract during the attorney approval period.
- Being flexible on the close date can help sellers choose your offer. Not all sellers want a quick close so don't assume that will seal the deal.
- Finally, keep your contract as clean as possible - meaning as few contingencies as possible. If you have a house to sell as a contingency, sellers will not accept the offer in a hot market. This is not the time to ask for concessions, repairs, or make unreasonable demands.
WHAT SELLERS NEED TO KNOW IN A TIGHT MARKET
- In order for your house to sell quickly and for the highest dollar amount, this is no time to try for an excessive price. Buyers are savvy and have likely seen many homes - they and their agents will not be fooled. You will end up accruing market time and lose the terrific advantage of being the newest house for sale.
- Older or unupdated homes will confront a market of younger buyers who want nothing to do with construction or remodeling. It will take longer to sell this type of home so it's essential to price correctly. I've seen small homes on small lots sell for considerably more than larger older homes on large lots because they had been updated.
- As your house hits the market there will be many showings. It's a challenge, particularly with children or pets, to vacate quickly and leave the home in a good state. With many showings in one time period (say an afternoon) plan on leaving and not returning until the coast is clear.
- I won't discuss staging at length other than to say that it's still absolutely necessary and will pay for itself.
You've received multiple offers - now what? You - the seller - have options on how to proceed. Discuss with your agent how best to deal with them. If several come in immediately and they are close, often the best action is to ask all buyers to come back with their "final and best" offer.
But it's not always the best path to take. If you have two offers and one is considerably better, I would encourage sellers to work with that one and the other might become a back-up offer. Why? Because some buyers don't want to get caught up in a bidding war and will back out. What if the higher offer is the one to do that?
And regarding that higher offer, remember the buyer with a financing contingency will need to get an appraisal for the home. If it comes in low, the deal may fall apart.
How long will it last? Some agents believe this market is temporary and will return to its sluggish nature later this year. The coronavirus will be defeated and life will slowly return to normal. More sellers are like to list then and low inventory could be a problem of the past. There really is no way to know for sure so let's concentrate on now and get your house bought or sold.