The real estate shortage also includes multi-family homes. There are few duplexes, triplexes and assorted fourplexes on the market at the moment. If you have a multi unit investment type property to sell give us a call.
There was a big sell off in about 2008. Currently rents are high and vacancy rates are low.
The data on the chart is from the NorthstarMLS which is deemed reliable but not guaranteed.
I know I have written about this before but it keeps happening. Sometimes when there are multiple offers on a home the highest offers or all of the offers are identical or close to exactly the same.
If you are a home seller do not be surprised if you get multiple offers and if all are lower than the asking price. It is even possible to get two identical offers that are less than the asking price.
Sometimes multiple offers are over the asking price. That is what home sellers hope for but is especially challenging for buyers. Usually buyers will not be told what is in the other offers. It kind of feels like gambling.
Three offers on a home are really all you need. That way there may be a tie breaker.
Sometimes sellers will not negotiate. If they don’t like the offers they will try to get more offers. I am not sure how that works for them. Negotiating with the buyers makes more sense and is probably faster too.
Occasionally buyers win in multiple offer situations by adding an odd an random number of dollars onto the end of their offer. For instance instead of offering 200K an offer could be for 200,890, or 210,000.78. 199K looks like a lot less than the other two numbers.
There is more to a good offer than money. A higher downpayment means that an offer is more likely to close. More earnest money means that the buyer is serious. A quickly closing date may be desirable if the sellers have already moved on. An offer where the buyers are paying their own closing costs is usually better too.
Some buyers are skipping the inspection contingency. Please do not skip the inspection. The inspection protects buyers and sellers. I strongly encourage buyers to have a complete home inspection.
The real estate market is ever changing. The average number of days on market for homes that have recently sold in St. Paul is around 36. I say it over and over we are in a strong sellers market, yet we cling to the traditional six month listing contract.
Why? Because most real estate agents will ask for a six month commitment. We love six month contracts. They are the closest we ever come to job security. We wake up each morning unemployed and are only paid after the successful closing of a real estate sale.
For the homes that are worth more then 600K a longer contract may be more appropriate but for everything that is at or below half a million six weeks should be a long enough contract. It is important to know the numbers. Find out what the average days on market are for a homes like yours that are in your area.
Contracts can be extended as needed and home sellers who have six week contracts have more control and leverage over the marketing process. If they do not like the way things are going it is much easier to switch real estate agents sooner. In some situations it may even make sense to put a home on the market for six weeks and if it doesn’t get an offer take it off the market and put it back on a few weeks or months later.
Go ahead and ask for a six week contract. If that doesn’t work try for two or three months. If the home sells in few days a short term listing contract will need to be extended so that it lasts through the closing, it takes at least 35 to 45 days from the time an offer is accepted until the sale closes if the buyer is borrowing money. A clause to cover that can be put right in the contract.
There has been a shortage of homes for sale for a few years now. It takes awhile for trends to reach the mainstream media, which is why real estate bloggers are important. 🙂
I read all sorts of reasons for this phenomena. There were a few years during the housing crash and great recession when the inventory of homes for sale was abnormally high. There isn’t any point in comparing 2008 and 2009 to 2017.
A normal number of homes for sale would be somewhere between 3 and 4 times as many as we have on the market right now.
There are several reasons why we are seeing fewer homes on the market. Here are a few:
Baby boomers own a lot of homes and are in an age group that is more likely to stay put than move.
There are people who are hanging onto homes because they are still underwater or are waiting until their home is worth a certain amount.
People who want to move to another house are holding off putting theirs on the market until they can find a home to buy.
During the housing crash investors bought up a lot of homes, especially starter type homes and small condos. These homes have become rental properties and will not be going on the market anytime soon.
We could build our way out of this, yet there isn’t a lot of new construction. There are still vacant buildable lots left over from the recession and vacant houses too. The new construction and in fill building I see is expensive housing.
Local building codes do not allow for a lot of creativity. What we need the most is affordable housing, maybe tiny houses and micro apartments. Builders tell me that luxury housing is more profitable to build.
Eventually there will be a kind of sell off when large numbers of baby boomers put their homes on the market. Experts were predicting that the great sell off would start in 2020. Now some are predicting it will start in 2025.
Home buyers need to be patient and somewhat flexible. Houses are being sold every day. They are not just for sale in May either.
It is a great time to be a home seller but there are limits to how much sellers can get for their homes. Sellers who are willing to negotiate will get the best terms and the fastest sales. Finding a buyer for a home for sale is fairly easy but is just one part of what it takes to close a sale.
I have met some interesting neighbors over the years and most of my home buyer clients really want to know who the neighbors are. Neighbors tend to come and go. Some of the best neighbors take jobs in other states and move away.
Other neighbors will stay put and some neighbors will run out to greet potential buyers and tell the all about the house and the neighborhood. Sometimes what they say helps sell the house and other times they chase potential buyers away.
People seem to want to live next door to people who are just like them and sometimes it works out that way.
I’ll never forget the time I listed a house and the neighbor across the street was selling his house. That was back during the buyers market. The neighbor would watch out the window and as people were done looking at my listing he would come outside and try to get them to look at his house.
Occasionally while buyers are looking at a house there are nearby neighbors behaving badly. Buyers usually quickly loose interest in the house.
How your neighbors house looks will affect your ability to sell your house. There isn’t much you can do about your neighbors except hope and pray that they behave themselves while your home is on the market.
My clients will tell you I like to tell stories. They are mostly true stories where only the names of the actual parties involved have been changed.
I can spot if from a mile away when “the Mr.” has finished the basement himself or has done some major remodeling. Sure there are a lot of folks who are very talented and they do wonderful work but they are not always aware of building codes and do not get permits for work that requires permits and licensed contractors.
I’ll just say that I have seen some wacky, dangerous and weird remodels and repairs that have had to be undone to make the home salable and safe again.
Sometimes un-permitted work has to be taken apart and inspected or redone when permits are needed for another remodel or when the lender finds out that work was done without permits and the home loan can not be approved until the work is signed off on . . . which usually means city inspectors have to inspect it and say that it is up to code.
There is work that can be done without a building permit, like painting and putting in new flooring, or new exterior doors. A new backsplash or even a counter top can be put in the kitchen too. Electrical work, plumbing, and construction all require permits. Decks require permits and so do fences. I could go on and on.
When I see a house that is for sale that appears to have had a lot of work done on it I look it up on the property look up web site and check for permits. Generally a home sale can not close if there are open permits. An open permit is one where the inspector has not signed off on the work.
I don’t think there is anything magical about permits. I have seen work that has been approved that should not have been. I think it is important for the buyer to know what he/she/they are buying. As one handyman recently told me, most anything on the interior or exterior of a house can be fixed, replaced or rebuilt.