Jim Valentine: Real estate feeding frenzies
For many years we have observed trends where certain types of properties or markets suddenly get active after lengthy periods of stagnation. We’ve had a theory that it was due to the property or market appealing to like minded people that were all making similar decisions at the same time because of their specific demographic characteristics and events that triggered their decisions. The Northern Nevada market is currently experiencing one of those moments.
Properties that have been on the market a long time are selling, sometimes with multiple offers. We couldn’t “give it away” for a long time and now we wish we had 10 of that type of inventory to offer. Quirky properties with deferred maintenance or physical obsolescence can take on a new value to a buyer with vision and the financial wherewithal to solve the problems. Those types of properties are now selling for surprising prices to happy buyers that are trying to get separation from the market by looking under the proverbial rocks to find a property to buy.
These dynamic markets also bring another type of buyer, the predator buyer. Such buyers swarm to these types of markets and hope to pick off properties at low prices. Yes, low prices in these times. They have methods of contacting owners and skewing the market data they present to unsuspecting Sellers while dangling their cash. They also go to the perimeter, outlying areas, where things haven’t quite gotten up to speed yet, and prey on property owners that have been on the market a long time. If they get a low sale or two they try to use that as market. While it may help a seller in need of cash, it isn’t indicative of the market or what is going to be happening to that market in the near future. Property owners should be aware of such buyers and call your agent for professional advice in such situations.
There are a few ways to compete safely and successfully in this market. It requires you to have a good understanding of the market and what you wish to accomplish. Be sure your agent knows what you want to do and what you have to get it done with, i.e.- loan amount you are prequalified for and the cash you have to add, or that you are paying cash, etc. Do you need to sell to buy? If you do get your property on the market so you can make a stronger offer by saying you are in escrow. Afraid of not having a place to live? Accept an offer from the party that will let you live in your home awhile while you buy and close on another home.
Make a clean offer if you find yourself in competition for a property. Don’t put in a lot of “weasel” clauses that will enable you to back out. There are plenty of ways to get out of a transaction if the home inspections or appraisal come back with deficiencies so don’t be redundant in your escape clauses. If you are a seller that likes one offer more than the others, but it has clauses you don’t like, counter the terms and clean it up. Make it simple and clean. If they don’t accept you might have saved time by not entering into an agreement that was destined to fail. Remember, this market can change as fast as it started, so you don’t want to lose time.
Remember to keep your wits about you. Don’t compromise your wants and needs out of panic created by the frenzied market that we are in. Be diligent, act quickly, write a clean, protective contract, and you will realize your goal. You may have to adjust your goals to the extent that the market circumstances dictate, i.e., offering a bit more in price or borrowing a bit more than anticipated to get what you really want. Sellers should compare offers and make sure you can get where your are going — that there is a replacement property for you whether a rental or purchase. Both are difficult to find these days so plan thoroughly.
The market is what it is and it is what it is a result of the activities of buyers and sellers. What other people do affects you so be ready to adjust and you and yours will be just fine.
When it comes to choosing professionals to assist you with your Real Estate needs… Experience is Priceless! Jim Valentine, RE/MAX Realty Affiliates, 775-781-3704. firstname.lastname@example.org