With values dropping and interest rates climbing, one may think it’s not a good time to sell or buy. No matter if you are a seller or buyer, there are opportunities for you both in today’s ever shifting real estate market.
Look, 2020 through the first quarter of 2022 was a lightning rod for the real estate market. Sellers, you received record returns on your investment and buyers, you received record lows in interest rates. No matter how you looked at it, there were benefits for both sellers and buyers. Now, with the market experiencing a bit of a “Hangover” it’s time to look at it as an opportunity. Let’s start with buyers.
From a buyer’s perspective, sure values are dropping but what do I do about heightening interest rates? Well, let’s look at the opportunities. Inventory is coming back and thus values are coming down. Often new construction is ahead of the curve. What we are experiencing at Kraus Home Team (KHT) is builders are in some cases providing buyers all closing costs to include pre-paids (Approx.. 4% of purchase price) and as much as an additional 10k to buy down the interest rate. In addition, KHT is negotiating below list price accepted offers. Often buyers just walk up to the builder and pay what the builder is asking. Be sure to enlist the services of an experienced REALTOR. Keep in mind, these services do NOT COST YOU a dime; the seller pays your REALTOR. Enlist the services of a RERALTOR that has a relationship with the builder in the way of past sales with that builder. That way the builder knows that agent is bringing a qualified buyer and makes it known he or she is also taking their buyer/s to other builders. It may sound like games but it is STRATEGY! Soon, re-sales will catch up and you will be seeing sellers providing closing costs assistance and rate buy down options. Buyers, keep your cash and take advantage of the incentives and lower prices now and re-fi later down the road when interest rates subside.
Now Sellers, we haven’t forgot about you. Look, prices are coming down, but they are not plummeting. Chances are if you bought your home more than three years ago, you are more than likely positioned to make a nice return on your investment. It is important more than ever to hire a REALTOR that has a proven track record BEFORE the boom of 2020 through the first quarter of 2022. I say this because it’s going to take an experienced agent to sell in this market. One that thinks out the box and provides more than most. One that will not be a “Yes Man” when it comes to agreeing with a possible unrealistic valuation. At KHT, we don’t get every listing we interview for, but we do provide an accurate valuation. It’s this information that doesn’t often sit well with Sellers but it’s one that needs to be communicated delicately and respectfully. The REALTOR that isn’t afraid to communicate this is one that will be your strongest advocate during the negotiating process. Keep in mind, that with inventory bouncing back, it is extremely important to make your house stand out from the rest. Refer to our previous blog regarding “Cost Effective Improvements”. At KHT, we recommend tactics like providing rate buy downs instead of price reductions. We are seeing houses selling for below market value because some agents just ask for price reductions when they don’t have activity. Discuss a rate buy down with a preferred lender of your REALTOR. Lenders need the business!
Hope this blog helps you. Please fill free to reach out regarding any questions.
