Selling Over the Holiday Season

Historically, December is a better month to sell than the rest of the Fall or Winter, which is generally considered part of the "slower" season in real estate. There are a few reasons why this is the case and why it might be a good time to consider selling your house around the holidays. We also have a few tips and answer some often asked questions that you should need to know about if you are planning of selling during this time. And be sure to check out Patrick on Fox 7 below as he shares his tips for selling during the holidays.

Serious Buyers Only

This is one of the best parts about selling in the "slower" season - you're really only going to attract serious buyers. While this can seem like a bad thing it is far from it. This means that the buyers you get are extremely motivated to move on a house and they aren't as finicky and flaky as some spring buyers can be. Beyond this there are some specifics that make December a great time to sell if you are willing to play it right. 

December Buyers are usually some combination of this:

• People that are relocating for jobs. There are lots of people that are relocating around this time of year and have a strong need to buy. They are usually under a time constraint and are looking to buy fast. 
• People with a little extra cash to spend. This is the time of the holiday bonus; large cash bonuses get paid out when companies do well and this usually happens around the holidays. This means that there is a good chance that buyers have a little extra cash to use for that downpayment. 
• People with time off. In December you have 2 weeks of downtime that you just don’t get any other time of the year. That means people who are looking to buy have a larger window of time to look and want to visit and see more houses.

Low Supply 

December is historically one of the months with the lowest number of houses on the market. In December of 2015 there were just under 8,000 active listings on the market in Austin. For the months of May through September there was over 11,000 listings. That is 3000 less homes available to buyers in December than in the Spring. What this means is that there isn't a lot of competition from other sellers. Additionally as we detailed above the buyers are more motivated during this time of year, this can lead to low supply and high demand - which is always beneficial to the seller. 

The Election

Now these reasons are general to most Decembers, however its important to remember that some effects are specific to certain years. For this December we just went through a very contentious election that had a lot of people on either side concerned. And traditionally when people are concerned about jobs or the future they are less likely to spend money, especially when it comes to something like a house. Now that the election is over we can expect a bit of a bounce back and some people who were thinking about buying in November but didn't, start their search up again. 

Best practices for marketing/selling:

• Should I/should I not put up holiday decorations?

  • Yes, but keep it tasteful, don’t go overboard. It can create an emotional connection for the buyer as well. Still want to declutter/depersonalize.

•  What do I do if someone wants to see my house on Christmas?

  • Yes. Only a very motivated buyer wants to see homes on a National holiday.  

• Pictures of the home during winter should be done sooner than later before the leaves change and before decorations go up. 

Why You Should Buy In The Fall

It's no secret that Austin is considered by just about every metric to be a strong seller's market right now. In our most recent market report we shared that for August there were 2.8 months of inventory within Austin and balanced market is considered to be 6.5 months of inventory. This just further confirms what we all know - it's great to be selling your home but it can be difficult if you are looking to buy. However if you are looking to buy hope is not lost, we've got a few tips that can help you get the house that you want for the price that you're looking for.  

Currently there 2,519 homes on the Market in Austin, with another 4,874 are listed for sale in the surrounding areas. That is 5% more homes on the market than there were last year. And 958 of them are new construction homes.  Within the last week, of those homes on the market, 404 have lowered their price, 49 homes fell out of contract and came back on the market and about 90 homes came off the market (either withdrawn or expired). This creates an environment that can benefit a smart buyer. 

Here are four reasons it can be better for you to be buying in the fall:

 

Less Competition

Most homes sell in the spring and summer months. Everyone clamors when new houses come on the market during those months and all that competition can make it harder get an offer accepted, or even submit an offer in the first place. This past spring we saw it was quite common that buyers had to submit an offer immediately after the house when to market if they wanted a realistic shot of getting the house. With less buyers crowding the playing feel you've got opportunity to really search for the home of your dreams without worrying it will get snatched up immediately.

Serious Sellers

 There are generally two types of sellers in the Fall, those who's homes went to market in the spring and summer and then sat until the fall or those who have to move out immediately, either because of jobs or family or something similar. This means that most sellers are seriously movtivated to sell. They aren't just testing the market or seeing what's out there, they need to sell and this is to the buyers advantage. 

Negotiating can be a little easier

Now can be a good time to make lower offers to see if the seller will accept them. The average sale in Austin goes for 98% of the asking price. Based on a median sales price of $289,990, that’s an average of about $6,000 of the seller’s asking price.If you can negotiate the seller’s another 1-2% off of that, that translates into a savings of about another $3,000 to $6,000.

Sellers who have been on the market for awhile are more ready to deal    

Of the 2600+ homes in Austin currently on the market, the average days they’ve been on the market is 88. This is double the normal average days on market of 40.  It’s a great time to negotiate for that dream home or that smart investment property purchase.

We hope this post has shed some light on some of the advantages that buyer's have in the fall. Be sure let us know if we can help you out with your home search or if you want to talk about any of the topics we've talked about in this blog. 

Selling Your Home: Getting More Than An Offer

Everyone knows that Austin is a seller's market right now. You all have heard some variation of the following story….

“We put our home on the market, had 8 offers in 2 days and sold it for $12,000 over our asking price!”

That’s exciting, right? And honestly, in this market we experiencing right now, this isn’t hard for any Realtor in our market to accomplish. The market can do a lot of the work if your goal is ONLY to get an offer. If your goal is to get it SOLD, then keep reading!

HOMES NOT STAYING SOLD

A new common trend that a lot of people ARE NOT talking about is having their home come back on the market after receiving multiple offers and having a bidding war.

Let’s first look at the statistics and see how common this trend is…

According to the Austin Board of Realtors, in the last week 465 homes have gone under contract in Austin. During the same period, 93 homes have gone under contract and come back on the market. That is roughly 1 in 5 homes not staying sold after initially going under contract!

From my experience, once your seller has picked an offer, most of the other buyers go away. They move on to other properties, their initial enthusiasm has waned and/or they rethink their initial bid. Losing out on this initial “herd mentality” can really suck the wind out of a home sale/sail. See what I did there…

The top reasons buyer’s back out of contract (in no particular order):

1. - They are not financially qualified to purchase the home
2. - They are having regrets about paying so much for the home after bidding it up
3. - The buyer and seller cannot agree on repairs during negotiations.
4. - The home not appraising for the agreed upon price AND the buyer and seller not agreeing on how to proceed forward
5. - Miscellaneous reasons: lost their job, lost their minds, were crazy to begin with, divorce, natural disasters, etc...

The sad reality is that most, if not all of these issues could have been easily avoided. The worst part is that, if the buyer AND the seller would have hired a more qualified Realtor to represent them, reasons #1-4 could have been avoided. 

If you want it to stay sold AND sell for top dollar, there are a few things you need to be thinking about.

 

#1 - Qualify the Offer

This is the simplest and first step you should take when receiving offers.

• Make sure the terms are fair and reasonable for all parties.

• Make sure the contract is completly and properly filled out. (You can’t imagine how many contracts I see with major mistake that can cost buyers and/or sellers a lot of money)

• Run a Seller Net Sheet on each offer to help compare offers and see which one will bring you the highest net proceeds at the completion of the sale. (Sometimes it is not always the highest offer that nets you the most, there a lot of other factors to consider)

• If any of the terms aren’t clear, call the buyer or buyer’s agent for clarification to ensure you know what you are accepting, countering or rejecting.

#2 - Qualify the BUYER

Let’s start with the premise that all buyers are emotionally drained, crazed lunatics who’ve made ten offers on ten houses only to be rejected. They are beaten down, kicked around and will do just about anything to get a house. We will call this buyer "BOMB BUYER", ready to explode at any point.

What we are trying to ensure is that your buyer IS NOT a bomb buyer. That they have thought the purchase through and are in a good state of mind to buy. It really helps when a cover letter is attached to the offer telling us a little more about the buyer. It is also prudent for a listing agent to have a conversation with a buyer’s agent. It’s amazing how often this does not happen and how amazing having a five minute conversation can get everyone on the same page. Texting/emailing does NOT count as a conversation.

Questions to ask are:

• How many offers have they made?
• How long have they been looking?
• Have they walked away from any purchases after going under contract?
• Are they first time homebuyers?

This line of questioning should get a good conversation going and help you understand how likely they are to continue forward if you decide to accept their offer.

#3 Qualify the Buyer’s Lender

This is another easy phone call that a good Realtor will make on behalf of the seller. Having them have a quick conversation will help give you a better understanding of how strong of a borrow the buyer is. It is also prudent to find out if the lender qualified them based on a conversation or they actually collected pay stubs, ran credit, etc.

Some good tips for working with lenders are:

• Are they local? Can you physically go visit them?
• Do they have a direct phone number you can call to reach them?
• Do they have an in-house loan processor that they can access quickly and easily?
• What is their track record for closing on time?
• Have their appraisers been coming up short on appraised values? Are their appraisers vetted and scrutinized regularly.
• Do they do a lot of the type of loans they are qualifying the buyer for? I.e. FHA, VA, Jumbo loans, condos loans, 1st and 2nd mortgages, etc.

If I am raising more questions than answering them with the above line of questioning, feel free to reach out to me so we can dig into why these questions are important.

Buyer tip: In a competitive market, choosing a lender based on interest rates and closing costs is not always the best idea. You need the lender who will go the extra mile, ensure you will close on time and make you look good to a seller. It’s about winning in this market, not about getting the best deal.

#4 Qualify Your Buyer’s Realtor

This is another area where you need to know you can trust the other party to perform and see the purchase all the way to closing. Believe it or not, there are a lot of Realtors out there who seem to enjoy having contracts terminate. They create emotional drama instead of being the calm voice of reason in the transaction.

Thousands of real estate transactions close everyday. Everyone agrees to the terms, all parties are happy and it is a win-win for both sides. There is no reason that the sale of your home shouldn’t happen just like clockwork as long as everyone is doing their job. Remember, clear and consistent communication by all parties involved solves 99% of problems that arise.

Make sure the buyer is represented by an agent who has experience (or is being mentored by an agent with experience), make sure they understand the type of property their client is buying and how the process works for the specific property--i.e. condos, land, multi-family, ranches all have different things that need to happen.

 

In summary, make sure due diligence is done before accepting an offer. This market moves fast and emotions run high. Have a plan on how you are going to review and respond to offers and stick to it. When offers come in, don’t stray from the plan. And if I didn’t touch on it enough, make sure your agent is picking up the phone to have real conversations with prospective buyers and their agent. Communication ensures you will net the highest amount and reduce the likelihood of contracts falling apart. If you have any further questions about selling your house or want to know more about something specific I touched on please don't hesitate to reach out. I would be happy to help you out in any way I can.