Wednesday, August 12, 2020 / by Vanessa Saunders
We’ve been focusing on listing more homes for sale during this seller’s market in the Hudson Valley. Having inventory to sell gives us a distinct advantage in closing more sales and competing successfully. It has also shown us an interesting aspect of human behavior.
When there aren’t a lot of homes to choose and an attractive new one pops up for sale, buyers flock to it in hordes. Unless there is something wrong with the listing (priced too high, poor location, bad condition, etc.) we will see a flood of showing requests in that first“Golden Window” — the period when the opportunity to get the highest price is at its peak (typically the first 14 days a property is on the market).
According to real estate journal Inman News, “Buyers look at new listings like bright, shiny objects and rush toward them in hordes. In a hot market with limited inventory, this behavior can be the single largest obstacle a buyer must overcome to secure a home.”
The reason is the nature of competition. When buyers flood a listing, some will write offers, but only one can succeed. So we’re seeing “survival of the fittest” at it’s finest - the strongest offer wins. We are frequently seeing offers over asking price, all cash and with no contingencies. In order to write offers like this, buyers must have extra cash on hand to up the bid if necessary and deal with any problems faced without the safety net of contingencies.
In this competition, FHA, VA or buyers with limited down payments have little chance of success. So what’s a buyer to do?
Buyers with limited means need to stick to properties that have been on the market for a while. Just because a house has been for sale longer than that “Golden Window” time doesn’t mean there’s something fatally wrong with it. Just because a home doesn’t sell immediately doesn’t mean it is a crumbling money pit located in a bad neighborhood next to a toxic waste dump. And on the up side, homeowners who have gone without an accepted offer are more likely to negotiate.
A seller’s Realtor can help clients by keeping track of expired listings and re-lists, for sellers who are desperate to get back on the market. After all, the goal here is for buyer and seller to have a “meeting of the minds.” Both buyers and sellers must adapt their behaviors to increase their chances of success.