Multiple Offers in Today's Market?

Starting about a year ago, homes have been sitting on the market for multiple months. No longer can sellers expect a reasonable offer within seven days or less. As I browse the Multiple Listing Service (MLS), it's not uncommon that I'll run into homes that have been in the inventory for at least over 180 days. So what's the key of ensuring offers to roll in within a short period? Price your home ridiculously low!

Yesterday, I called an agent who has a home listed in the Echo Lake area of Shoreline, WA. The home was listed for $249,950. It encompasses 3 bedrooms, 2 bathrooms, and roughly 2,000 sq ft with a two car attached garage. It is an older home, built in 1959, and it needs updating. However, it is in livable condition. Most comparable homes in the area go for around $350,000 to $400,000 range. It was a bold move by the seller to list it at a price that is such a steal. Sure enough, the agent confessed to me that they looked at a whopping 29 offers the day before.

The seller obviously was not willing to have his home sit on the market for six months, so he took the aggressive route. The ecstatic listing agent revealed that the winning buyers had waived basically all their contingencies, and were willing to pay up to $340,000 maximum. Luckily for them, the next best offer was only willing to bid up to $310,000. Therefore, the top buyers got away with buying the property for a mere $311,000. Most other competing offers were at list price and offered no real competition. Even though the winning bidder did not get the property at $250,000, $311,000 is still a slight bargain. Now let's hope that the home is structurally sound, since the buyer did waive his opportunity to inspect the property.

So is pricing your home drastically below market a good strategy? Well, the listing agent did admit that the offers were overwhelming, and that if he had to do it again, he might want to start the bid slightly higher, to eliminate the non-serious bidders.

I would suggest $300,000 would be a good start.

Simple Rules While Selling Your Home

Here are some general guidelines to help sell your home. These pointers are inexpensive ways to persuade that buyer to make an offer!

1. Clean up your counter space: It's a hassle to store daily appliances that you use multiple times a day. However, keeping your counter space clean and efficient will create the sense of larger space, more room to work with, and will also give buyers the opportunity to envision where they can put their own appliances. So unplug the toaster oven, the electronic can opener, the blender, and so on, and store them away.

2. Rent a storage: You probably have a lot of things stored in your garage, basement, closets, and anywhere else you can find. Just because buyers can't see your clutter without opening any doors, they will find it! By keeping your storage spaces clean, buyers will be able to see the amount of storage the house can hold, and will be more inclined to see the space as actual "storage spaces" for themselves.

3. Put away personal photos: It's great to show off your family's photos to friends that come over, but it's really unnecessary for buyers. You want buyers to focus their attention on the structure of your house, not for them to spend their time guessing how old your children are.

4. Keep the lights on: Light will invite the buyer to step into your home and explore all areas s/he can see. In a dark house, many buyers will skip to turn on the lights for each room, and will potentially miss a great feature of the house that would have otherwise been noticed. Bright lighting will also open up the space, making it seem bigger than it really is.

5. Open the curtains and blinds: Like the point above, letting the sun light into the house will definitely help make your spaces seem larger and more inviting.

6. Keep your pets at petcare: Often times, buyers are intimiated by a barking dog or a growling cat. This will definitely encourage a potential buyer to turn away from a home at its front steps. Because you want your home to appeal to all potential buyers, it's best to keep your pets out of the home during showings.

7. Clean, clean, clean: Before you put your house on the market, make sure to wipe down every window, door, table, chair, and so on. A clean and organized home will give buyers a sense of order and the comfort to make the space their own. Don't forget to put away the dishpile in the sink.

Loan Crisis? Not so bad if you can handle it.

A year ago, I was able to qualify any of my real estate clients with just about any house they wanted to get into. As long as they were comfortable with the monthly payments (debt), I was comfortable. It made business a lot easier, and a lot more enjoyable. In today's world of real estate, even the best borrower will run into hiccups during their financing stage.

I had a buyer who made tons of money, who was doing 20% down, and who had 750+ credit score. Perfect candidate right? Shockingly, she was forced to do close to 30% down with her second mortgage interest rate not so prime. What does this mean? It means that even if you think you are going to be able to buy a house with no problems because you have great credit, lots of money to secure the loan with, and more than a solid income track, you are in for a surprise. That surprise will likely come to you two days before closing if you are lucky.

But let's not be completely pessimistic. You can still buy a house in the end if you are prepared to handle the hurdles that the lenders will throw your way. I can't stress the importance of keeping up to date with what your credit score is. Having a good credit score will not only make your financial situation stronger, but will also save you tons of money. It is true that people with bad credit will either be charged a lot more for a loan (because banks think they are risky borrowers), or lenders will simply refuse to lend to you. Concurrently with having a good credit score, leaving some cash in your pocket will probably prove to be wise. In my example above, if my client had not had some extra money in her accounts, she would have lost her purchase. Always have some reserves just in case two days before closing, the bank asks you for additional money.