Autumn – A time to cool down

By Judy Boyle

This summer has been a sizzler. And I am not just referring to the heat index. There are 20 to 30 buyers making offers on every new listing. Sellers are seeing offers 10 to 20 percent over their list prices. Bank appraisers are forcing those offers back to market value. Sellers are refusing to close because they did not find suitable housing.

Low housing inventory… three weeks’ supply, according to what the real estate professionals refer to as the absorption rate…clashed with the lowest mortgage rates in history to create the perfect storm of real estate. With the first ever “Summer Market” winding down, let’s all cool off and figure out how buyers and sellers alike can attain their real estate goals by the end of the year.

First, let’s start by discussing the preapproval letter. Whether you are a first-time home buyer or are looking to downsize or upgrade and need to finance the purchase, you need a preapproval letter. Regardless of its expiration date, if your preapproval letter is more than 30 days old, it is outdated. For example, if you were approved for a mortgage in the amount of $500,000 back in March when the rate was 3.75 percent, your principal and interest monthly payment would have been $2,120, assuming a 5 percent down payment. With the rate now at a mind-boggling 2.75 percent, you would now qualify for about $550,000 and your payment would be about the same.

Now let’s discuss the inventory. While new listings that are priced correctly are scooped up faster than disinfectant wipes, there are several homes that are sitting for 30 days or more. For whatever the reason, these homes may be worth a look even if they are above your maximum budget. Motivated sellers may not want to publicly reduce prices but may be willing to negotiate.  They also want to move on to their own next chapter. A skilled agent will know how to identify viable options that might not otherwise be on your radar.

And speaking of moving on to the next chapter, sellers that regard a “suitable housing” contingency as a lifeline, please consider other options. Otherwise, you are asking your buyer to be willing to incur non-refundable inspection and appraisal fees, give up their existing home, and get excited for a closing that may never happen. Many buyers have the flexibility to offer a “rent back” option that allows you to stay in the house beyond closing. Arrange to stay temporarily with family or friends if need be. Explore “extended stay” options that provide all the comforts of home – even allow you to bring the family pet – without binding you to a long-term lease agreement. And the best part is, if you sell your home outright, you won’t need to attach the precarious “home sale” contingency to your offer when you do find your next dream home.

So as we enter the cooler autumn months, let’s keep the momentum going. There are plenty of buyers out there just waiting for new inventory to come to market. Low inventory continues to drive up property values while low interest rates keep those homes affordable. Together, we will all weather this perfect storm.

Boyle lives in Northborough where she is also a Chapter Leader of the Neighbor Brigade, a nonprofit organization that assists families in times of crisis. She has been a real estate agent since 2003 and consistently wins awards and accolades for excellence in customer service and sales volume, culminating with her recent induction into the RE/MAX Hall of Fame.

Her mission is to empower her clients to make smarter decisions through data-driven insights and local market knowledge. She invites you to follow her on Facebook at www.facebook.com/judyboylerealtor, call or email her for the FALL 2020 Home Buyer and/or Seller Guides or for a complimentary market analysis.

Judy Boyle, Realtor®

Proudly serving the Borough’s and Beyond with honesty and integrity since 2003

www.judyboylecares.com

[email protected]

508-561-7164