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With recovery comes new challenges for buyers, sellers

By   /   July 22, 2013  /   Be the first to comment

Remember those heady days from the middle of the last decade when you had to bring a blank check to an open house and outbid other would-be buyers on the spot? I wouldn’t be surprised if you don’t—those days seem long ago. And while they certainly have not returned, we are seeing glimmers of 2005 in sales of certain properties and price points.
Just last week, one of my listings, a local property that had been on the market for a while dropped its price for the second time. It was a nice home in a family neighborhood, move-in condition, and the second time was a charm. The price hit that sweet spot where it was suddenly the hottest property on the market. I had two offers on it within a half-hour, and four by the end of the day.
With interest rates beginning to inch up along with slow but measurable economic recovery, buyers are starting to jump off the fence, making quick sales and bidding wars for right-priced houses ever more likely. If you’re a would-be seller who has been waiting to get into the market, this isn’t bad news. If you’re a buyer, you should know that for the first time in a long time, you might find some competition out there.
So what to do if you want to increase your chances of getting in your dream home?  Do your homework. Have your agent prepare an offer and be ready with a good-faith deposit (typically just $100 at the initial stage, increasing to 5% of the purchase price to bind the contract.)
Losing contingencies is another good way to come out on top in a crowded buyer’s field. The fewer contingencies you have, the more leverage you have. Even if there are no other potential buyers in the mix, one could come down the pike, and if they make an offer without any attached clauses, most likely you will be left with 48 hours to lose yours, or release the seller from the agreement.
As a seller, what do you do with the embarrassment of riches that is immediate multiple offers? It’s customary for your agent to contact the agents of all who made offers to let them know and give everyone one more chance to put their best offer on the table.
Other times, a seller might get a full-price offer right out of the gate, and assume that a better one will soon follow. For whatever reason, this is often not the case—most often the offer you receive first is the best. Call it the early bird getting the worm, or perhaps a bird in the hand is worth two in the bush, given that verbal offers don’t stand in Rhode Island. The only offer that counts is the one you have in hand.
With continued market recovery, real estate is going to look more and more like it did back in the good old days. Inspectors, lenders, and appraisers are all busy these days, and these are all good signs. People are starting to feel the momentum. It’s not huge, it’s not a train, yet, but it’s coming.

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