As you likely know, the Richmond world of real estate, at the moment, is known as what we call a “seller’s market.” What does that mean, exactly? Well, it’s a basic example of supply and demand: in a seller’s market, there are more buyers than sellers, so the sellers have the upper hand in establishing the terms for the sale of their home. While several things determine the type of market, the main influencer is inventory; and, we all know that in Richmond, inventory is low. Extremely low. Go ahead, cue the music, because we are right there with Jon Bellion–we are talking LOW, LOW, LOW, lo-lo-lo-LOW, LOW, LOW, LOW, LOW. Interested in seeing the stats for what make up this situation? Check out the Kelly Blanchard Real Estate Group’s recent blogpost to see exactly how much inventory there is compared to the number of sellers. This combination of a seller’s market, a surplus of buyers, and low inventory leads to lots of folks making offers on the same home, lots of traffic in homes, and short, quick, unhindered sales. But, don’t worry, we are here to help you through this.
Are you feeling discouraged? Were you hoping to buy, but thinking now that you should just wait it out? No! We are here to tell you that we have experience in this market. We have walked our clients through the offering process when their offers are one of many–six, eight, ten, thirteen (!)–on the table. There is a way to be savvy as a buyer in this market, and we are here to help you do that!
step away from your emotions | As hard as it may be to have an objective outlook when shopping for a home, it’s really important when you are looking to buy in such a heavily weighted seller’s market. Not all sellers may be kind or flexible, they may not respond to you on time, they may refuse to do things that you think they should. Step back and take a breath. This situation is not personal to you–it’s a by-product of the market. It’s highly likely that you, as a buyer, will be one of many buyers submitting offers in this market–especially in areas that have extra high demand (think: the Fan, Bellevue, Westham for example). Being able to think clearly and navigate your offer without the emotions that could come with it, is super-helpful. (Although, we do get it, emotions can be part of the package!)
know your market | It is really important to pull on your rainboots or strap on your wedges and get your foot in the door to see some houses–this is especially true if a house pops up that looks like it could be a fit. In this market, there is no time to lose–when you see something great, call Kim and schedule an appointment immediately. Learning your market takes time and dedication from you and from us–as your agents–but it’s a really important part of the process. Being in a home, walking around, seeing the yard and the lot and walking through the neighborhood will give you a great idea for the pricing wherever you are. Just because the Richmond market is hot in one part of town doesn’t mean that will be the case the next neighborhood or two over.
keep looking ahead | While past comparable sales can be helpful, when the market is accelerating at a rapid pace, looking back to what happened in the past is not the best way to go. In a market where multiple offers are being presented, you don’t want to make an offer on this year’s hot home based on what sold last year next door–your offer will be turned down and turned down quickly. Be smart about the market–consider the asking price, consider how quickly homes are selling, and get ready to make a firm, strong offer!
get going: offer high, offer fast, offer flexibly | Once you’ve bolted into the door of your dream home, get ready to make a good, strong offer, and do it right away. Offer high from the start and try to have your offer accepted so that you aren’t in a bidding war once the other 10 folks have made their way into the home. In a Seller’s Market, you want to be as flexible as you possibly can when it comes to terms and negotiating–if they need a fast closing, do your best to accommodate; if they need wiggle room to find a new home, be flexible with the closing–they want to rent back? Sure! Most sellers want to know that the offer they are getting is solid and has few contingencies. Offering large down payments, waiving appraisal clauses or capping inspection costs can help your offer stand out among the others and appeal to your seller as well.
loan locally | While having a pre-approval letter is great, we strongly, STRONGLY encourage you to use local lenders. Any agent will tell you that local folks know the lay of the land and are readily available when an issue pops up come closing. We’ve seen more than one deal turned down and passed by because someone used an online lender or their brother’s wife’s best friend in Manhattan.
raise the bar | When you have the strongest of offers and you want to go that extra mile–or if the seller’s agent calls for “highest and best” offers–you can use an escalator clause. An escalator clause means that you offer W, if the next client offers X, then the escalator clause says that you will offer Y above the highest offer up until the total price of Z. Make sense? Basically, it’s a way of continuing to up your offer when you know you are in a scenario with multiple, good, and competitive offers.
While the market can be wild, we want you to know that we are excited to work with you and ready to help you navigate the waters of making offers in a low-inventory, seller’s market! Have questions about this? Want to chat more? Give us a call!