Real estate prices are on the rise across the country, and typical buying practices won’t cut it as many sellers receive multiple offers.
Buyers and sellers in the Belleville area have been affected by a lack of housing inventory, and there’s no one clause that will guarantee your offer will be accepted.
However, there is action you can take to improve your chances and stand out from sellers’ other options, real estate professionals say.
Here’s some advice from a real estate agent based in New Baden about how to approach making an offer, as well as industry insight on selling during prime time.
Should you hold off on buying right now?
Angie Zahn, a licensed real estate agent and managing broker, said Belleville is a tough market for buyers right now, as most areas in the country are favoring sellers due to supply and demand issues.
“Since it’s a supply and demand issue that we’re having, the prices are off the charts,” Zahn said. “We’re just in an odd, odd time. I’ve been selling real estate for over 30 years, and I have never seen quite what we have now.”
Zahn said one unique factor in Belleville’s housing shortage is the city is in the middle of the season for military families relocating to be near Scott Air Force Base.
Despite the challenges posed by low supply and high demand, Zahn said she would still recommend buying right now, because the situation could get worse for buyers.
“Right now with the interest going up, and the expectation is it may go up again, this still is a good time to buy,” Zahn said.
The interest rate on a 30-year fixed mortgage is up to 5.37%, according to data from the Mortgage Bankers Association. The number is up 0.17% just over the past 10 days, and the rates for 15-year fixed mortgages have not been spared from increases.
How can buyers make competitive offers in this market?
Buyers’ approaches have had to change as a result of the seller’s market by making their highest offers outright, as many sellers are considering multiple offers at one time.
Those looking to buy may also need to submit pre-approval letters from lenders with their offers, ask for less extras and waive inspections in some cases.
“A lot of the market analysis that I’m doing now, it seems that the houses are selling sometimes $10,000 or $20,000 or more over what the comps are showing,” Zahn said. “It’s everything except giving your firstborn child. That’s just about how it is.”
The higher home pricing has hurt buyers not only by forcing them to make compromises they wouldn’t typically make, but also by creating appraisal gaps preventing them from securing financing.
Lenders will only offer the lower end of appraisal pricing, Zahn said, and with Belleville homes selling for $10,000 to $20,000 over what’s normally expected, some sales fall through because buyers are unable to bridge the gap between what appraisers say the house is worth and what sellers are asking.
“I try to educate my buyers a bit to not take it personally when the 14th seller has told you ‘no,’ they’ve accepted another offer, and not to get discouraged that you’ll find the right house,” Zahn said.
For those ready to brave the buying market, Zahn said she recommends getting a pre-approval letter, coming in with your highest offer and working with a professional real estate agent to manage your expectations.
While it can be easy to get caught up in the excitement of the purchase process, Zahn said buyers should ensure they are making good financial decisions by working closely with their lender and getting advice from an agent about the potential return on investment.
How can you navigate offers as a seller?
To avoid alienating buyers, Zahn said sellers should prioritize ensuring their house meets legal requirements for government financing.
If you are interested in selling your house, Zahn said you should not tell anyone you want to sell until you have a plan for where to go. Your house could sell out from under you, because potential buyers are making offers after one showing and even sight-unseen.
Once you’ve received multiple offers, Zahn recommended weighing terms for the offers on the table, including the monetary offer, financing plan and any stipulations such as an appraisal gap or waived inspections.
“Sometimes, it’s not about the most money. Sometimes, it’s about the best terms,” Zahn said.
Flexible closing dates are often taken into consideration, and now is the time when sellers can be picky about securing the most convenient sale possible.