Creative offer design in a market with low inventories
Breathe in. Exhale. Evaluate. strategize. That’s the message I’m delivering at the start of what is clearly shaping up to be another wild ride in real estate in 2022. seller market? stock shortage? inflation? Rate hikes? Policy and investor changes? Yes, to all of the above! That’s why we have to get creative when designing the offer.
How do buyers and agents gain valuable traction in this ever-evolving marketplace? They’re changing their mindset, getting creative and aligning with key players and partners to ensure they win deals and secure more listings.
Agents and buyers must adapt by finding new ways to bring buyer pools to the closing table. One of the many ways we see this being accomplished is through the way listings are structured.
Thoughts on the current market
Buyers choose to forgo any inspections and offer to pay over the estimated value to entice sellers to move their bid to the top of the bid piles. While the method has certainly proven beneficial for sellers, it can be a slippery slope for some first-time buyers in particular if they are not fully educated on what those specific clauses really mean and how they may affect it.
I mean, isn’t part of the fun of buying a house when your dad comes by and points out every crack in the ceiling? Seriously, gaining a competitive edge in this housing market can take some creative thinking on the part of the agent.
With most listed homes attracting multiple offers within a few days, there has also been an increase in cash purchases, making this crazy market even more difficult to navigate.
Cash-out refis for second homes
Many homeowners have taken advantage of historically low interest rates and have taken advantage of the equity in their homes by taking out a cash payout refinance and using the proceeds to buy their next home in cash. This has led to an increase in second home purchases and investments which I believe we may see just a little slowdown in 2022 due to recent changes in this area in terms of pricing.
Realtors were able to leverage their past business books and, along with their lenders, leverage their equity and payout refinancing expertise, targeting a new demographic of buyers who might not otherwise have purchased multiple homes.
The market shifts have also highlighted the importance of relationships. It’s always important to surround yourself with a trusted team of experts, but in this climate it’s imperative to have strong alliances with those who can help you reach the finish line.
This means ensuring that all parties in the home buying process fully understand the complexities of this market, are industry leaders and ultimately can result in more homeowners coming to the closing table.
There is no room for error in this market, and if you really want to succeed, you will quickly learn that innovation, forward thinking and strong relationships give you the edge you need to win more and lose less. Cheers to continuing to evolve and finding new ways to help our communities attract more homeowners!
Tracy Chongling is Vice President of Guaranteed Lending for Delaware.
This column does not necessarily represent the opinions of the editors of RealTrends and its owners.
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Tracy Chongling at [email protected]
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