It’s no secret the last two years have been eventful, but especially for the real estate industry. A rare combination of historically low interest rates, rising home values, and low inventory fueled what turned out to be the perfect storm for sellers. On the other hand, buyers continue to be frustrated with the lack of housing options and bidding wars when they find a place they like.
New data from the National Association of Realtors shows close to a 30% increase in average home prices since 2019. So, a residence that sold for $400,000 before the pandemic would likely fetch almost $80,000 more. Zillow also indicates that more than half of buyers had to take a break during the process, while a recent poll from Opendoor found that a whopping 98% of buyers mentioned losing out on a property at some point in their search.
What’s the industry like in the Denver metro area specifically? Well, buyers quickly realize a bid even 20% over the asking price may not be enough. Aggressive buyers have no problem submitting a hefty offer if it means being able to stop engaging in bidding wars and start building equity.
Let’s consider an example with one particular buyer who was tired of renting and willing to go above and beyond for homeownership. He came across a listing for a suburban townhouse in early January and immediately connected with his agent to schedule a showing. The buyer fell in love with the place but knew he had to make his offer stand out.
The seller’s agent listed the townhouse at $370,000 — a price she knew would attract a high volume of buyers. She was right, as over 40 interested buyers and their agents toured the home over four days. Not surprisingly, the seller received 12 offers, including the winning offer from the buyer mentioned above, for $420,000.
Now, we can’t say for certain what happened with the other 11 buyers who missed out on the townhouse. While some might have become homeowners since then, others likely gave up on their homeownership goals or put them on hold. We’re here to tell you, though, that you can overcome buyer burnout.
Here are eight ways to stay motivated in this cray market and get the home you want.
Work with the right agent
You’d be surprised how many people choose the first realtor they contact! Remember, the agent you choose will be guiding you through the biggest purchase of your life. Ensure they’re experienced in the industry and have your best interest in mind.
Buyers are now scooping up properties in a few days. Unless you’re financially prepared, it’s impossible to come out ahead in such a market. Spend the necessary time gathering documents to present yourself to sellers and their agents in the best possible light.
Just because you get pre-approved for a $600,000 loan doesn’t mean you should only look at $600,000 homes. Stick to a budget while accounting for other housing-related expenses such as HOA fees, insurance, and taxes. The last thing you want is to end up regretting your home purchase because it left your family in financial disarray.
Stay the course
With so few homes available, you may miss out on a home or two you liked. But don’t panic! You only need things to go your way with one residence.
Prepare to move fast
In this kind of market, buyers can’t afford to wait. That’s why it’s critical to be on the same page with your agent and make an offer as soon as possible. Today, many buyers submit an offer within 24 hours of seeing a home.
Avoid letting the market dictate your homebuying journey. Whether it’s your first, next, or forever home, remember you always have a choice. There’s nothing wrong with moving on from a house if the price is too steep or it doesn’t have certain amenities.
Use an appraisal gap
Let’s get back to the buyer of the townhouse from earlier. He knew he needed to separate himself from other offers, so he ended up opting for an appraisal gap. Doing so allowed him to pay more for the home and, in turn, made him a frontrunner for the residence.
Take a break
We get it — buyer burnout is real. Maybe you’re tired of scheduling showings with your agent only to be outbid yet again. A little break from it all could be just what you need!
At American Home Agents, our realtors are known for their industry expertise and positive attitude. Give us a call at (303) 695-5900.