Life in the Real Estate Balance
I have often thought, and said, “Real Estate is like Art.” It’s only worth what people are willing to pay for it. In today’s real estate climate that couldn’t be more evident. Currently, there are about ten times more buyers looking for homes than there are homes to purchase, at least in Asbury Park. And I have to say I am pleased with the way home-buyers are handling this unbalanced market. Sellers may feel they have the edge because the inventory is low. That’s partially true. Although, some may want to capitalize on the lack of inventory and jack up the price of their home by fifty, seventy five, or even a hundred thousand dollars, and feel that people will pay it simply because there aren’t many homes to choose from.
I know it’s tempting to push your agent to list your property at the top of the bubble, but that can backfire on you. Buyers are tipping back the scales in the other direction, creating a balance within the unbalance. The smart, savvy, and patient buyers know what homes are worth and they are not going to overpay because they’re swept up in the lack of options. Today’s buyers are willing to wait it out. They learned from the market bust 10 years ago when people overpaid for their home and are still underwater today. This could also be the effect of the current market: lack of profitability = lack of inventory.
What you’ll find with overpriced homes is that many of them sit on the market for months and months; with only a few showings and even fewer offers, if any. Eventually, the seller will begin to reduce the price, but by the time it gets close to what the home is actually worth, they’ve lost more than half the buying season. Or, they will remain steadfast but become discouraged and decide not to sell, taking a viable product off an already scarce market.
The smart thing to do is work with your real estate agent to price your home. A home that’s in good condition and priced fairly could end up with multiple offers within just a week or two of being listed. What happens next is pretty interesting. The seller’s agent will go back to the bidders and ask for a highest and best. The pool of buyers now have the opportunity to put in their highest offer and the seller will choose the best of the best. In a case like that it’s not uncommon for a home to end up selling for more than the asking price, sometimes as much as $20,000 over asking. But that’s okay, because it’s the buyer’s choice to go higher, or not. The buyer always determines what a house is worth based on what they are willing to pay.
If you’re thinking about selling your home and want to know what the fair market value is, ask me to make you a CMA, (comparative market analysis). You can even ask more than one agent if you like. The suggested price from both agents should be within $10,000 in either direction. Another option is to have what is called a ‘Restricted Appraisal’. This type of appraisal is designed to guide homeowners and real estate agents on where to price a new listing, it’s less detailed and more cost effective. It can also give some assurance that your accepted offer will fall within the guidelines of a banks formal appraisal. For more information on restricted appraisals contact Cheryl at Premium Appraisal Services: firstname.lastname@example.org.
The true edge a seller has in today’s market, if priced right, is selling their home fast and maybe even for more than they asked for.
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