Nobody wants to see limited inventory of any kind, especially when it comes to searching for and buying your next home! The numbers for December 2019 are in, and compared to the same time period the year before, there seems to be no surprise the usual LACK of availble homes on the market! Take a look at the latest comparison chart from NWMLS showing both December 2018 and December 2019 numbers (both Condo and Residential).
Black Line is Residential. December 2018 had 2.2 months of supply. December 2019 had 1.8 months of supply -18% !
Green line is Condo. December 2018 had 2.1 months of supply. December 2019 had 2.3 months of supply +9.5%
AS A BUYER, WHAT SHOULD YOU DO?
Have you taken all the steps needed to prepare for buying a home, you are ready to start shopping! What happens when you’re out searching different areas- either driving around or online at https://www.patrickjohnsonrealestate.com ? If it is in the month of December, you are finding few options, or even nothing for sale in your price range. Heck, it may not matter WHAT your price range is while in the month of December here in Whatcom County. There simply is very few options to choose from as a home buyer this time of year.
There are a few steps to help you get a leg up on your competition if you are moving this time of year and there is limited inventory.
1: Be prepared to offer a higher than asking price (within reason of course).
This may involve different tactics. Go in with your best and final offer if you know there will be multiple offers involved. Many times a strong initial/final offer is easier for sellers and their agent to decide on. While it’s always prudent to get as much return on investment as possible, being uncomplicated will help facilitate a faster response and will give you an advantage over other people hoping for a counter offer (if they come in with a lower priced offer). Many people don’t like the anxiety of back and forth multiple offers.
You can also set yourself apart from the others by offering a larger “Earnst Money” deposit to let the sellers know you are serious about moving forward with the purchase. You may also consider making it non-refundable after certain addendums (inspection/financing) are satisfied as well.
2: Be prepared to act quickly (my automated email service helps in this regard) and dilligently.
As I’ve stated in many previous blogs, having your house buying ducks in a row will put you ahead of the competition. Getting your pre-approval letter with your lender is a must. Proof of funds for cash buyers is almost always required in normal markets, never mind hot sellers markets.
3: Be as accomidating to the sellers needs as possible, when possible.
Are you flexable with closing dates that the seller prefers? That would make a large difference for a seller that may need an extended escrow period, as opposed to the “normal” time frame.
What about “rent back”? Some instances may involve a rent back period by either you or the seller. Be flexable with that as well. If the seller hasn’t been able to find a replacement home (surprise, low inventory!) and you are still able to stay in your current home, offer to rent the home back to the seller on a per diem basis (and a time limit) so they will be comfortable taking your offer over others that may force them to move to quickly!
On rare occasions, you may be able to move in and rent FROM the sellers until closing. There are many situations where sellers may not be able to extend their financial dates on a property they are buying as well.
4: Tell your story!
Remember to let the seller know who you are. When there is low inventory and sellers get multiple offers, make sure they know who you are. Lots of people like to keep in touch with old neighbors when they move away. They care about who is moving in to their old house because it may impact the neighborhood. Write a great cover letter to the sellers (along with your offer) and let them know how much you love the house and of course, the neighborhood. It may have an impact on what offer they accept.
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Those are just a few ways to combat this season of low housing options. The best thing to do as you get started in your home search is to contact me and I will help you understand the best process to follow to make sure you are set to compete in this sellers market. Remember to sign up for my free “home listing alert email” service that will send you new home listings that match your criteria directly to your inbox as soon as they hit the market.
Wow, what great tips. Thanks for your transparency. This helps the buying process seem less intimidating.