Tips for home buyers in a seller's market - Fenton Tri County Times

 A combination of factors, including low interest rates and a pandemic-driven decision by many city dwellers to look for houses in the suburbs, has created a housing boom for much of 2020 and 2021.

 That boom has created an undeniable seller’s market in real estate.

 Just what is a seller’s market? Financial experts define it as a marketplace in which there are fewer goods for sale than there are interested buyers, giving sellers the ability to dictate prices. Since mid-2020, there has been an extremely low inventory of homes for sale but a very high interest among purchasing parties.

 Data from the National Association of Realtors indicated that, by the end of February 2021, housing inventory fell to a record low of 1.02 million units. These factors have led to a surge in competition from buyers, including bidding wars on homes and all-cash offers to entice sellers. In December 2020, the median listing prices for single-family homes shot up 13.4 percent from the same time the previous year, according to Realtor.com, and it hasn’t slowed down much since.

 For many in the real estate profession, this is the best market they’ve seen in their careers.

 Kimberly Pfeiffer, owner/broker of Mitten Life Realty in Fenton, said, “Most people are looking for homes that don’t require a lot of work. Homes with property and barns have also been quite popular.

 “It’s difficult to predict the future because I don’t think anyone could have predicted the last year and a half.”

 Pfeiffer’s advice for people looking to buy is to be prepared financially, have their pre-approval done with a local lender, be ready to make aggressive offers and make decisions quickly.

 “If you’re thinking about selling start getting rid of junk and clutter,” she said. “How your home presents will determine how many and what kind of offers you receive. It’s all going to happen very quickly so that will also have you better prepared for your move.”

 So where does this leave buyers interested in relocating? Here are some tips.

• Consider areas with slower overall price growth.

 Experts say the southern and midwestern United States offer the best value for home shoppers because of their meager price growth. ClearCapital, which tracks housing values, says San Antonio, St. Louis and the Dallas/Fort Worth areas experienced the least price appreciation from 2019 into 2020.

• Get preapproval or have your funds ready.

 Speed is the way to go if a buyer is interested in a property and wants to make an offer. Real estate professionals say buyers should be “offer ready,” which means having a mortgage preapproval letter or proof of funds for a down payment ready to go. Failure to have funds in check can slow down the process or compel sellers to reject an offer.

• Work with a real estate agent.

 These are complicated times and it pays for buyers to have a professional working in their corner. A real estate agent uses his or her knowledge to make a timely offer and negotiate on the buyer’s behalf. He or she also will provide insight into specific neighborhoods, amenities and school districts.

• Eliminate certain contingencies from the equation.

 Contingencies are factors that must be met before a sale can go through, according to the relocation site moving.com. A common contingency is the need to sell one’s current home before closing on another. Asking for extended closing periods or certain home repairs are some additional contingencies that can make buyers less attractive to sellers.

• Make it personal.

 Buyers can offer a personalized note with the offer that may connect with the seller emotionally and set one them apart from others who have made similar offers.

Tips from a local home builder/Realtor/broker

 Jim Sabo, owner of Pine Hollow Custom Homes, said the pandemic did not slow custom new builds. Pine Hollow Custom Homes are at the top end of the price spectrum and Sabo, who also is a Realtor/broker, said his development in Grand Blanc is close to multiple hospitals and business headquarters so his clientele are typically in the medical or business professions, and even professional athletes.

 Not too long ago, the cost of lumber skyrocketed causing frustration in the building industry but Sabo blames bad press about those inflated high prices, which have since come back down to normal.

 Because there is such a low inventory of existing homes, Sabo said prices of existing homes are often overpriced making it a seller’s market. People are turning to building their own homes, which has impacted inventory of some building supplies. Now that lumber prices are back to normal levels, construction is back in full force.

 With custom built homes, Sabo is seeing clients asking for home offices, smart homes, theaters, two kitchens, two master bedrooms, occasionally pools and more. He said it also was this way prior to the pandemic. Clients are using these custom built homes as a compound.

 For those considering building a new home, Sabo suggests that they get moving and do it now. Interest rates are at an all time low, and maybe as low as they ever will be. He said there is every indication that inflation will cause prices to increase.

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