South Orange County Blog from Bob Phillips

All of a sudden, the time to sell is now

An article by Megan Hopkins of HousingWire.com on April 2, 2013

“It seems the transition is complete. In a recent survey by Redfin, 82% of agents described now as a “good time to sell,” while only 57% described now as “a good time to buy.”

Let’s back up to the third quarter of 2012, when 54% of the agents polled considered it a good time to sell, but 75% called it a good time to buy.

This complete ‘180’ in the housing markets can only be backed by dangerously low inventory, prices that continue to appreciate and low interest rates pushing buyers to buy now.

I recently wrote about a house my husband and I put an offer in on. I felt fairly confident about our offer and we’d managed to tour the house less than 24 hours after it had gone on the market, putting our offer in the same day.

Unfortunately, within a day, four other offers were put in and the seller chose a higher one.

SOLD-over-asking

As a buyer, this is discouraging. It’s frustrating to know there is zero ‘wiggle room’ when it comes to negotiations and often homes are selling above the appraisal value.

On the other hand, I can only imagine sellers are riding high and feeling good, as multiple offers pour in on their homes within a day. In fact, 98% of agents surveyed by Redfin agreed that sellers are becoming more confident about the market.

With that in mind, 83% of agents agree that buyers also are becoming more confident, so it’s not totally a lost cause for those of us trying to find a home.

Working in this industry, I can’t tell you how many people I’ve heard say “the time to buy is now.” Well, as a buyer (often frustrated with this sellers’ market), I can tell you that the time to sell is now as well.” ( End of Megan’s article.)

In South Orange County, California – my neck of the woods – multiple offers are commonplace for any “nice” new listing. ( “Nice” means those listings that don’t have any serious negative issues, such as being backed to a busy street, really old and outdated, or simply in decrepit condition.)

Listing agents are now “playing games” like waiting a week or so before allowing the property to be shown, or a similar period to “evaluate” offers, building up a backlog of buyers, intent on out-bidding one another.

So, what is a prospective buyer to do, in such a market?

They would be well advised to engage an experienced local agent who has a good network of fellow agents, who – if lucky – might get first dibs on those precious new listings.

What should prospective sellers do?

First, this is a GREAT time for sellers to negotiate that listing commission.

Listings are gold right now and there’s very little reason to offer the listing agent of the property a 2.5 or 3% share of the listing.  Many good agents will accept as low as 1%.  ( They know that with a “nice” listing, they won’t have to do many of the usual chores they do, to get listings sold – in THIS market, many houses are selling just by coming onto the market.)

That leaves the selling agent’s share, which should be no MORE than 2.5%, resulting in a total listing commission in the 3.5 to 4% maximum neighborhood.

Second, go a little higher than recent listings. ( Listings, not closed sales.)  It’s always better to come down in a week or two, than to sell too quickly and wonder if you could have gotten more.

How long will this seller’s market last?  There’s no way to tell, other than to keep your finger on its pulse, the way a good agent will do.

I have been successfully helping my buyers and sellers navigate these market ups and downs for over 36 years, and would be pleased to be considered as your agent.

Whether you’re thinking of buying or selling, or both, shoot me an email or give me a call, and let’s talk real estate.

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