By KRISTI BAILEY
Five months ago, getting a sign-unseen offer for an existing home listing was a rarity. So were buyers waiving contingencies to sweeten their offers. And what about the drama when buyers are not aware that they’re competing in a multiple-offer situation?
When markets get hot like ours all kind of innovations and tactics crop up as buyers face heightened competition for a limited number of homes for sale. Here are a few local examples.
According to a study commissioned by Redfin in May and June, almost half (45 percent) of people who bought a home in the past year made an offer on a property that they hadn’t seen in person. The study included 1,400 people across 29 markets. It has prompted predictions that by the end of the 2020 buying season, there will be a lot more sign-unseen offers.
The local share of these offers is not as high as the study, but it is increasing. The reason is simple. Someone planning to relocate here can shop the market on the Internet. They can do a virtual tour, check out the schools, cost of living, and just about anything they want to know. But what they can’t always do is get here fast enough to lock in a deal.
And not all of those are coming from buyers from other areas. Redfin’s study found that about a quarter of the respondents who plan to buy in the next year are limiting property tours due to coronavirus. And some refuse to tour in person at all. So, as we slog through the market’s dog days of August and into move into the fall season, there’s room from the quick, sign-unseen listing offer trend to get local legs.
By the way, don’t write off autumn for buying and selling. There has been a closings spike in October for four of the past five years.
Another market indicator staple that has less luster these days is “days on market.”
It’s just not the best indicator of how fast the listing-to-sales tempo of the hottest properties has developed. Why? Because there are overpriced properties on the market with owners won’t budge. There’s also the tactic of listing over the sweet spot then making price reductions if the sellers don’t get a quick contract. Both distort the days on market indicator.
Another one that has morphed is a buyer’s pre-approval loan status. In the past, agents have urged it. Now some insist on it because there are too many examples of buyers finding the home they want, then losing it because they have to go back to the lender for approval.
And then there is the drama that comes in multiple offers situations. It centers on the idea that the buyer is entitled to knowing if he, or she, is competing with other buyers. It’s a nice thought. But it’s not always the case. The standard of practice of the REALTOR® Code of Ethics states that the existence of offers should only be disclosed with the seller’s consent. The seller alone determines whether or not prospective buyers will be told that there are multiple officers.
There are also escalating frustrations with getting appraisals scheduled and done and getting someone to make repairs once a home inspection is done. Both are slowing down the closing process. That’s simply a condition of a market where the demand for these services is taxing the available local resources.
NETAR is the voice for real estate in Northeast Tennessee. It’s the largest trade association in Northeast Tennessee, Southwest Virginia region representing over 1,200 members and 100 affiliates involved in all aspects of the residential and commercial real estate industries.
2020 NETAR President