By Gary Kelley, Realtor®
“Gary, how’s the market?” Some agents will respond with generic, “healthy” or “challenging” and not really answer the question. The truth is the answer is not exact and varies by market and price point.
Nobody wants to hear stats (and I placed some at the end of this article). My answer to “Gary, how’s the market?” is: “It is great for sellers in the under $500K range and challenging for buyers. Homes over a million are available.”
Take the case of Lou and Jess. First-time buyers, they’ve shaken the couch and have scraped together a down payment. We’ve been looking at house with them for over a year, although we took some time off for their wedding.
Finally, we found the house – a nice 1960s vintage contemporary in need of some fresh ideas and finishes.
We did research. We researched the home. We researched the neighborhood market. We knew the pricing history for the listing agent. I chatted with “dad” in New York and answered his questions.
We prepared an offer $10,000 over asking with a $5,000 inspection threshold for remediation, and a typical mortgage contingency.\
The house had multiple offers. We reviewed our offer and felt comfortable with the terms. The listing agent asked for some date changes we accommodated.
Then the text came. “Hi Gary, thank you so much for the offer, but I am sorry to say the seller has accepted an offer higher than yours and without contingencies.” We subsequently found out the other offer was $20K over asking and cash.
In the U.S., we seem to be accustomed to everything coming down to win/loss. Did Lou and Jess lose?
Lou and Jess need a mortgage so they need to be clear they can leave a deal if they can’t get financing. Going $20K over asking means the house needs to appraise, otherwise the financing won’t happen (banks won’t loan more than the appraised value). Going without a home inspection isn’t advisable.
My sense is Lou and Jess won. They didn’t overpay and buy something without inspection. It may seem a hollow victory, and everyone was disappointed. It’s part of the market reality.
We counsel our buyers to be smart and not to “fall in love with the brick.” Another house will come along. Lou and Jess will make it their home.
Market statistics from MLSPIN for Westborough:
4/29/2019: 31 single family homes on the market, with an average of 67 days on market.
4/29/2018: 36 single family homes, with an average of 93 days on market.
That looks good for sellers! Unless you are selling in the $1-$1.5 million range, where there are 10 homes on market (roughly a third of the total inventory) and they are averaging 123 days on market.
If you need advice on selling your home or buying a new one, give us a call.
Kelley is a member of the Rotary Club of Westborough and is an award-winning Realtor. He invites you to follow him on Facebook at https://www.facebook.com/MoveWithGary/