Without a doubt, we in Dallas, Collin and Denton counties, are experiencing the most intense “seller’s market” in our history. For many years we have been accustomed to a 5 to 6 month supply of available homes from which buyers could choose. To experience a situation where another buyer might happen to make an offer on the same home that you made an offer on was rare and coincidental.
Today, with only about a one month’s supply of homes on the market, the typical buyer may be competing with four or five other prospective buyers—all submitting a written offer on the same home at the same time. This situation leads to frustration (at the least) and more than likely panic on any give prospective buyer’s part.
The question now becomes, “how can a professional real estate agent best help their buyer client in today’s tough seller’s market”. The reality of today’s intense seller favored market means several things to the prospective buyer.
- It is not the time to make a low ball offer! More than likely the listing that the buyer wants may attract four to ten written offers within 48 hrs. of being posted on the MLS. It is not surprising that the lowest offer may at a price above the listed price. This is not the time to attempt to find a seller who is desperate and who will possibly accept an offer 3% to 10% below the list price. In effect, the buyer is not so much negotiating with the seller as he is structuring an offer to compete with several other potential buyers. If the buyer’s offer is too low it will not get any consideration by the seller. If it is too high the astute seller may reject your client’s offer out of fear that it may be impossible for an appraiser to justify the buyer’s suggested price. The buyer needs a really knowledgeable real estate professional to help him in a competitive bidding situation.
- Don’t lose the competitive bid by a few thousand dollars. Several communities in our market area are experiencing value increases of 1% per month. (This comment is for preowned homes). Let’s say that you are considering a home listed at $290,000 and with our professional help decide to offer $296,000. If four appraisers all agreed that today’s market value for the home was exactly $290,000 the market value would likely increase to $296,000 within 60 days from contract date. Don’t lose the bid over a few thousand dollars.
- We are strongly motivated to help our buyer clients decide to purchase a brand new home. Why, because in many communities we are seeing home prices increase by 2% per month (or more). We recently assisted a prospective buyer submit an acceptable written offer on a 5 bedroom, 3100 sq ft home, at a contract price of $319,000. The prospective purchaser could have bought the same model home two years ago at a price of $224,000. That is a phenomenally high rate of appreciation. If values in that community continue to appreciate at the same rate, this particular home would sell for $454,000 in another two years. Think this is impossible. No! It is not.
- A comment from lack of knowledge. Every month we talk to a couple who want to buy a larger or more suitable home. One of these couples might make a statement similar to this. “I think the market is overheated. “ “We may just wait a couple of years until prices come back down.” These statements do not come from wisdom, but lack of knowledge. In the past 360 days 13,447 homes were purchased in the submarkets (including McKinney, Frisco, Plano, Allen, Little Elm and Prosper). We know of four new employees who are moving into the same submarket. The employees from the four employers will alone be seeking over 15,000 homes in the same submarket in the coming one to two years.
The message is clear. IF you want or need to buy a home in this area, do it now. You need the help of a professional real estate agent to help you buy the home of your choice. If you are a seller you do not want to take an offer lower than today’s market value.
Call me to assist you.
214 801 1696