It’s a One-Sided Market


Gary Kelley, Realtor®
Gary Kelley, Realtor –
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Unless you are living completely under a rock, you know this is a hot seller’s market. Sellers are putting their homes on the market and often getting multiple over asking offers. Negotiating this market takes experience so the seller and buyer are not ultimately disappointed.

Chuck Joseph is one of the broker owners at RE/MAX Executive Realty. A former teacher, Chuck recently chatted about the most competitive market he has seen in 35 years, highlighting the following four points when preparing or submitting an offer.

The number one point by far is the financial strength of the buyer, as measured by Loan to Value (LTV).  In this market someone with a 3% down payment is not as strong a buyer financially compared to a 20% down buyer or a cash buyer. As the process moves forward, a financially secure buyer may be able to readily overcome surprises in the process, as opposed to shaking the couch looking for change to make up the difference.

The next item is price. It seems simple enough. Put the property on the market, have buyers offer tens if not hundreds of thousands over asking, go right to closing. It may be that simple on HGTV and in the real-world price is a key. Sellers want to maximize the value of their home. Buyers want to secure the property in an era when properties are scarce. Set the price too high and it will scare buyers off (even in a sellers’ market). While it may be exciting to watch over asking offers arrive, the experienced Realtor® knows to look beyond price. What are the terms? What are the financing contingencies (it’s great to come to an agreement on a high offer, and a huge buzz kill if the appraisal is for far less). This is where a strong LTV comes in….a buyer able to accommodate a larger mortgage percentage when compared to appraised value may be able to still win the deal!

Contingency waivers are another hot topic. The inspection waiver is often considered to telegraph to the seller a desire to not renegotiate a deal. While I discuss these with buyers and sellers, in my heart I want to make sure the buyer knows what they are getting and not be surprised after closing. Some agents will state, “informational only inspection.”  Please tell me what that means. Aren’t all inspections for information?  Some will use high deductibles (i.e.:  we will not ask for anything < $10K). Of course, the questions coming off a high deductible are many (who picks the contractor, what features, etc.). If my buyer insists on no inspection, we will discuss a home warranty to at least provide some financial relief of major system repairs or doing an inspection after the purchase and sales agreement is signed.

Another popular contingency waiver is “we will waive the appraisal.” Again, music to a seller’s ears. If a loan is involved, an appraisal may be required by the bank; the buyer may want no appraisal and the bank requires it. Think there will be an appraisal if the bank requires it? If there is an appraisal shortfall, who makes up the difference?

Also, all those things you hear about in the offering process (like “we don’t have anything to sell to make this deal happen) need to be in writing. If there is no home sales contingency it can be in the offer, on the pre-approval/pre-qualification, or both.

A sellers’ market may look easy to navigate, and still waters run deep. Have an experienced Realtor®, attorney and loan officer on your team.


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Gary is heard on WCRN AM 830 discussing “All Things Real Estate.”

If you need advice on selling your home or buying a new one, give us a call at 508-733-6005.

It’s a One-Sided Market