No doubt about it. We are in a really goofy real estate market in the Washington, DC area. And if you want to move, finding the perfect house is a whole lot easier than buying the perfect house. And buyers who haven’t been in the market for a while are finding the current ground rules a little puzzling, to say the least.
It wasn’t long ago that I’d say something like, “If you seriously want to buy this house, you need to jump on it right now,” and my buyers would look at me like I was just pushy. But today, I don’t even have to tell them they have to move quickly, because most learned the hard way even before they met me, and if they do move very quickly, it may improve their chances of getting the home, but there are no promises for the early birds.
One of the tricks for success in the current markets is to try to keep buyers away from bidding wars, which are usually won only by those willing to do totally crazy things to get a house, including paying way too much, waiving important contingencies (like those governing home inspections or appraisals) and liquidating not only their own life savings, but often those of their parents, to come up with an all-cash offer. So in this market, where things seem move very quickly, how is it possible to increase the chances that you will not face stiff competition.
Here are some ideas that work sometimes, though not always:
- Many agents post new listings on Thursdays, with instructions that offers are due by a certain deadline, often by Tuesday afternoon the following week. And some buyers’ agents ignore the deadline and submit a pre-emptive offer on Thursday or Friday, usually non-contingent and over asking the price, with a very short time limit, often four to six hours. I’ve done this with mixed results. Listing agents will almost always try to talk their sellers into waiting, and sellers will often ignore their agents’ advice and sign the early offer. And waiting is almost always the wise thing for a seller to do.
- Look at houses that have been on the market for a more than a month. For example, the average time on the market in Montgomery County, Maryland is 55 days, while the average for pending listings is only 14 days. The unsold houses may be messy, dated, poorly presented or on a major traffic artery. But most houses are not like spouses. While some are pretty hopeless, you can change most of them from funky to fantastic, and sometimes it doesn’t take all that much. And if a house is overpriced, a good buyers’ agent can often negotiate a result that works for her clients. And if the house is messy, most of the mess will move out with the sellers.
- Go through listings that came on the market and did not sell during the listing period. Some went under contract then fell apart and others did not attract buyers because they were overpriced, poorly presented or difficult to show to buyers.
A lot of the people I work with have been unsuccessful in the market, losing more than their share of bidding wars. And if they stick to whatever strategy they’ve been using, they will continue to have a tough time in this uber-competitive housing environment. Each buyer’s strategy has to be carefully crafted to address their particular situation.
If you are planning a move, or if you are curious about what your home is currently worth, I would love to help. You can reach me easily by phone or text message at (202)549-5167, and unless I’m driving or in church praying that an offer will be accepted, I’ll answer or call you right back. You can also email me at firstname.lastname@example.org.