Sales of single family homes are expected to rise in 2017 and median sales prices are also expected to increase. High mortgage rates and a lacking group of first time home buyers will make the market a little tougher when it comes to selling houses. However, that shouldn’t discourage you, as the location of where you practice real estate will also make a big difference. In San Francisco, or New York, for example, there’s rarely a shortage of buyers, as those are typically hot markets.
If you live in a suburban area within Omaha, Nebraska, for example, you may find you’ll have a little more trouble. See: Why 2017 is the Best Year to Invest in a House. However, with inventories remaining relatively low overall in the US, you should still be able to make a comfortable living this year, according to real estate experts. Here are some real estate tips for both buyers and sellers for 2017.
For buyers: don’t reach too high & get pre-approved beforehand
Buyers tend to get caught up in the thrill of bidding wars. After all, humans by nature are competitive. And people get pretty jealous when they feel someone is trying to take the house that they’ve already imagined themselves in. Bidding wars can cause a lot of trouble though. They usually result in a buyer spending way more than they should have, and way more than the house is actually worth. Over-paying for a house not only hurts you in the present, but also in the future. Read on: The 5 Real Estate Trends that Will Shape 2016 – Realtor.com. When you go to sell it, you’ll be selling at a loss. But not at a market loss; a loss that you created yourself. Instead of focusing on “hot” areas, perhaps find similar homes that aren’t in highly desired areas. Try to find homes in areas that are still close to the location you’d like to be in, but one that you can purchase without breaking the bank.
In order for a seller to think you mean business, you should have your pre-approval letter handy to show them right when you make an offer. They want to know that you’ll be able to pay for the house. Otherwise, they’re going to consider the current offers that they have, instead of waiting for you to submit your letter.
Also, sometimes a seller will consider your offer over the others even if your offer is less. This happens when a buyer provides fewer contingencies than all the other ones, and is also willing to be flexible with the move-in date. Many times, when a buyer submits a pretty high offer, they expect all of their needs to be met before the sellers. So, you may have an advantage over the others if you give the seller a bit more leeway.
When you go to buy a house, realize that you get what you pay for. Inspections are extremely important. Even if it is a brand new construction home, find out who the builder was and do some research on them. Do they have a habit of cutting corners? Are many of their new construction homes falling apart only a few years after they’re built? Are they notorious for using cheap materials, such as lower-grade counters or cheap caulk? Check out the Better Business Bureau Association to see if any major complaints have been filed against the builder.
For sellers: you can take advantage of the hot market, but don’t get greedy
Realize that if you set your price between 4-9% higher than it’s actually worth, you’re likely to rake in offers that are closer to your home’s real value than if you start way higher. First, you may run off buyers because most of them begin their searches online. That being said, they usually enter in the highest amount they’re willing to spend on the search settings.
This means that your home might be in their price point. But if you price it too high, they won’t even see it! This means that your house is going to sit on the market for much longer than it would have. See: Top 10 Real Estate Markets to Watch in 2016. You never want your listing to go “stale.” Days on the market in terms of a home on the internet is a big deal.
Buyers won’t even look at a home that has been listed for months, because they feel it indicates a major problem with the home. Also note that when a market is “hot,” sellers wonder why they have to pay the full commission to the realtor. This is why sellers are accepting less money…because it means they have to pay less of a split to the buyer’s agents.