For prospective homebuyers, understanding the dynamics of current mortgage rates is crucial in making informed…
U.S. home prices are swelling, and anxious buyers and sellers are worried about a real estate market crash. However, today’s market bears little resemblance to the one that fueled 2008’s crisis.
Market watchers are wary because the median sale price in the U.S. in February was $313,000, an increase of almost 16% from a year earlier. Still, whatever happens at the end of this frenzied period isn’t likely to simulate the 2008 housing bubble.
Nationwide, homes are selling in an average of 20 days, and the average 30-year fixed-rate mortgage is near a record low. So though things currently feel a bit hectic, the market will adjust to the natural ebb and flow of typical economic cycles.
Prices aren’t expected to fall anytime soon, and years of under-building mean that the country is facing a serious housing shortage. Total home supply shrunk 28.2% from a year ago, according to the National Association of Realtors. Growing demand and diminished supply make a perfect combination for escalating prices.
If you’re considering selling, remember that the ball is in your court. Buyers know that sellers have many other buyers interested in their homes. Sellers are being flooded with offers in today’s market.
Now more than ever, the market is very lopsided in favor of sellers right now who can determine their own fate.
However, sellers should be cautious about pricing their homes too high because buyers still won’t pay for a property that’s majorly overpriced.
So what should you do when you receive multiple offers for your property? Here are the three factors you should consider when comparing offers:
- Payment Method. Cash is king, and paying in cash allows buyers to waive the appraisal, which is great for sellers. However, if you’re confident in the buyer’s lender and their mortgage approval, there’s not much risk in taking an offer from a buyer with a loan. Also remember that local lenders are often more accessible on nights and weekends, which can be crucial in this fast-paced market.
- Contingencies. These days, sellers are in the position to ask for as few contingencies as possible. Many buyers are waiving home inspections right now and are finding ways to waive home appraisal contingencies.
- Compare apples to apples. The best way to compare offers is to lay them side by side. A good strategy is to create a spreadsheet with all the essential information to make comparisons simple.
Ultimately, it’s an excellent time to be a seller as long as you have an experienced real estate agent to guide you through today’s sometimes chaotic market.