We’ll Take It!!

Gotta GoHome buying in the Portland metro area remains fast and competitive. Most buyers have learned from their agent or from experience that there really is no time to “sleep on it” once they find a home they like. Sellers continue to receive multiple offers within a day or two of hitting the market. I sometimes tell my buyers to wear slip on shoes during our tours because they won’t have time to tie laces!

It’s a wild ride for sure. There does not seem to be a major slowing on the horizon. Low inventory and big demand continues as people from out of the state and country continue to move here, many flush with cash. The urban growth boundary also will continue to limit new construction of homes and apartments.

In case you have been traveling the outer galaxy and didn’t know…prices have escalated quickly. First time buyers under $300k price point ($200k for condo & townhomes) are struggling and being forced to sacrifice from their original wish list. Many are needing to push their search further out (more commute time) than they had hoped. They are also considering homes that are smaller, have fewer features or are in less desirable condition.

It’s definitely not a piece of cake out there for buyers, sellers or real estate professionals. It’s extremely fast paced, demanding and emotional for us all.. That said, it still continues to be one of the best times to buy in Portland metro for two main reasons. (2) Home values are projected to continue to increase due to supply and demand. (1) Low interest rates. Real estate is a long term investment, and 10 years from now, homeowners will be grateful that they battled this market and bought a home at under 4% interest rates… and in one of the most beautiful places in the world.

Okay, that’s it for now … gotta run!

                   Kevin  G.           KevinGormanSells.com

carry-money-house

 

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Battling For Backup

My buyer visited a new listing the very next day after it came on market. The home went pending that same afternoon. Less than one day, and gone! I called the agent to ask if we could present a backup offer (in case the sale with the current buyer fell apart). The agent said yes, but that there were two, possibly three other back up offers that we would be competing with. Oh brother…competing for backup position?

Tapper

 

So, there I was, writing a backup offer above list price and with several other bells and whistles that we hoped would make our offer the best of them all.

 

It was interesting how good it felt when the seller selected our offer over the others. HOORAY, we had won! I felt great… for about two or three seconds. Then I remembered that we didn’t actually get the house yet. We still had to wait and pray that the first position buyers changed their minds, chickened out, lost their financing, got arrested and sent to jail (etc., etc.).  Of course, we’re not wishing for harm to come to those buyers, but we are definitely hoping SOMETHING happens that will move us into first position. Sigh…I also can’t help but wonder if our backup offer is actually even better than their offer. 

For sellers, a signed and accepted backup offer is a powerful tool to have in place. It offers peace of mind knowing they will not have to go back on market should the first buyer bail out. It can also add leverage during negotiation of repairs with the first buyer. Sellers don’t feel as much pressure to agree to expensive repairs requested by the buyer. They just need to have their agent inform them that they have secured a contract with a strong backup buyer who would LOVE to take their place.

Supply and demand folks….supply and demand………

Cheers!

      Kevin G.                  Kevin@KevinGormanSells.com

carry-money-house

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The Property Must Appraise

When I complete a market analysis for my sellers, it shows a suggested price range for listing their home. This range is based upon a detailed comparison of the homes that have sold in the past 3-6 months and within a one-mile radius.

Lately, I have been suggesting that my clients list their home at the high end of my analysis. Then I watch them stare off into space with a big silly grin and dollar signs rolling through their eyes.

Jackpot At that point, I gently remind them that if they accept an offer from a buyer who is obtaining a loan, the property must appraise at or above the final purchase price or the lender will not approve the loan. 

It is common in our current market that multiple offers are pushing prices above list. Sellers should discuss all offers carefully with their Realtor. The price offered by a buyer with a loan can realistically only go “so high” until there is a risk of the home not appraising at purchase price. If that happens, the transaction can fail.

The solution for sellers?…Before accepting a questionably high offer from a buyer who is obtaining a loan, the seller should negotiate that the buyer will agree to move forward with the purchase regardless of appraisal result. That way, if the appraisal is low, the buyer will have to move forward anyway and pay the difference between a low appraisal and the agreed upon purchase price. In addition, seller should require buyer to immediately provide proof that the buyer has the ability (additional cash beyond their down payment and loan closing costs) to do so. All of this, in writing right up front and upon acceptance of the offer. 

On the other hand, if given the choice, a cash offer could be a seller’s dream. In this case there will likely not even be an appraisal to worry about… JACKPOT!

Happy selling 🙂 

       Kevin  G.           www.KevinGormanSells.com

PEAK

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