Just the Facts
New Housing Boom Mantra - Paying More Than List
It all seems long ago now – the casual home shopper, the drives to check out the neighborhood, the luxury of sleeping on the largest decision you’ll ever make. Trying to buy a home now feels more like being thrust into the trading pit at the Chicago Mercantile Exchange – the frenzied bidding, the need for lightening fast decisions, the packs of serious shoppers at an open house. In one fraught situation, a home near Union Station in Washington, D.C., drew 168 offers in December and sold for almost twice the asking price. In the tonier neighborhoods of Los Angeles, 20 bids per house is not uncommon, according to real estate agent David Kean. And the speed of deals can be intense. "In the middle of a snowstorm we have seen houses sell in one day," says Sam Schneiderman, owner/broker at the Greater Boston Home Team agency. "At open houses on million-dollar homes you are literally bumping into people, it's that crowded."
A dearth of homes for sale has run smack into a suddenly energized buying crowd egged on by rising values. The National Association of Realtors says the number of existing homes on the market in January -- 1.74 million -- was 25 percent lower than a year ago, and the lowest level since 1999. Price is obviously the main lever in all deals. What’s particularly important now is to understand how the seller will handle bids. Some collect all bids and immediately choose a winner, typically the highest offer, which is often more than the asking price. Other sellers give the top three or five bidders the chance to make one counteroffer. In those instances, you want to get into the bake-off but leave yourself room to counter.
In today's tight market, some sellers are asking every bidder to counter. That's what happened to a client of Schneiderman's in the recent sale of a house in Newtown Center, Massachusetts, listed for $975,000. The seller got nine offers -- four to nine offers is the norm now, Schneiderman says -- and asked for counter bids on all nine. Schneiderman's client bid $1,016,000 and lost. The seller's agent said the winning bid was "significantly higher."
- Bloomberg News, March 1, 2013
RE/MAX DFW Associates Has High Customer Retention
Based on postings of source of business, the agents at RE/MAX DFW Associates report 40 percent of all home sales are repeat business – clients whom the agents have worked with in the past. Most importantly, over 80 percent of all RMDFW agents reported a repeat business sale or listing in 2012. This is an extremely high rate in the industry. RISMedia Magazine in their surveys report:
1) Six percent of agents with 3 to 5 years of experience received repeat business last year.
2) Agents with 6 to 15 years of experience, the number is only 17 percent for 2012.
3) Only 38 percent of agents with over 16 years of experience received repeat business during the previous calendar year.
Most real estate agents do not make an effort to maintain a solid relationship after the closing. Yet every closing is a huge opportunity for referrals and future repeat business.
- RISMedia Magazine, February 28, 2013
Record National Home Sales in January
January posted a 4.5% increase in previously owned home sales in January, and new homes posted a 16% increase. The only month better than January 2013 in the past six years was April 2010 – the last month of the federal tax credit. The increase is the latest positive report for the housing market, which began recovering last year after a deep, six-year slump. Steady hiring and nearly record-low mortgage rates have encouraged more Americans to buy homes. Home prices, meanwhile, rose by the most in more than six years in the 12 months ending in December. Steady price increases are also contributing to the housing recovery. They encourage more people to buy before prices rise further. Higher prices also build homeowners' wealth, which can spur more spending and economic growth.
- Associated Press, February 27, 2013
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