Brad's Real Estate Blog

Once upon a time, would-be home buyers had to outbid each other and forgo inspections to get the place of their dreams. Now, sellers are the ones making concessions.

Maybe your house is currently on the market, or maybe you’ve noticed that your street has become littered with For Sale signs?! The truth is, real estate is in a transitional state.

The amazing amount of appreciation that homeowners saw only a few years ago is now a thing of the past. The traditional 3-5% appreciation per year is most likely going to be the norm while the industry levels out. You can plan on seeing prices “hold” over the next year or so, but be prepared to even see a slight decline in property values in some areas.

I’m sure you’ve heard the term “buyers” market thrown around when you hear people talking about real estate. What “buyers” market or “sellers” market means in terms of real estate, really refers to who has the upper hand in the negotiation process.

At the height of a “sellers” market, there is less inventory of homes available, and more buyers ready and able to purchase. Homes sell more quickly and closer to their asking price (sometimes even more, due to a bidding war) in this type of market.

During a “buyers” market, there are a lot of homes available… BUT less buyers who are ready and able to purchase. Homes tend to sell lower than the asking price and tend to spend more time on the market. Buyers have the privilege of being more choosy and are able to spend more time considering their purchase. Homeowners become more motivated as the months go by and become more willing and eager to consider all offers depending on their need to sell.

Many factors contribute to the price of homes. The availability of money to loan based on the federal interest rate at the time is one of the biggest factors. The lower the interest rate, the higher the availability of funds. It is much easier to obtain a loan when the interest rates are low. When the interest rates are high, the availability of money to loan is more scarce, and harsher restrictions are set in place. Many buyers although willing, are unable to obtain financing.

If you are a seller in this market it is very important to give careful consideration to how you arrive at your selling price. Following the advice of a trusted and licensed real estate agent who knows your market will put you in a better position to sell your home quickly. Homes that sit on the market for long periods of time develop a stigma of being less desirable.

The biggest mistake you can possibly make in pricing your property in this market is by basing your figure on an outdated re-finance appraisal from more than 6 months ago. The loose lending requirements of sub-prime lenders were more lenient in their appraisals, often giving the homeowners the “needed” value when it came to closing the re-finance.

While your home may have at one point appraised at a specific value, you may want to seriously consider paying for a new appraisal by an un-biased appraiser. Without having to spend any money, a knowledgeable real estate agent should be able to provide you with enough accurate market data to help support a specific suggested listing price.

Good luck and Happy House Hunting!!!