By Peter Ricci
There are numerous signs out there that housing is recovering, and the folks at Redfin have presented yet another one – the preponderance of multiple offers.
In the company’s latest Real-Time Home-Buyer Tracker, which sampled nearly 6,000 buyers who worked with Redfin agents in 18 major metropolitan areas, 71 percent of respondents faced competing offers when they signed an offer on a property.
That stat is perhaps the most compelling evidence yet that many of the business strategies agents had grown accustomed to using in the depressed real estate market no longer work. Two of the most notable are low-ball offers and sleeping on deals.
Low-ball Offers: Although everyone loves a great deal, the days of hugely-discounted sales are dwindling with increasing acceleration, and unless a property is a short sale or REO, it’s highly unlikely that a seller will give an offensively-low offer even the faintest hint of consideration; after all, he or she could now have several other offers to consider.
Sleeping on it: In the immediate months following the housing collapse this used to be a great strategy. Find a property, take note of its features, and sit back and watch the asking price fall further and further and with more regularity. After awhile, it seemed like a give-in, that a home’s asking price was negotiable. But not anymore. Now that the demand for homes is on the rise and inventory levels are down (by the latest measure, they’re down more than 20 percent from last year), residences still on the market are garnering significant attention from consumers, and agents cannot afford to waste any time contacting the seller’s agents, and – obvious as it may seem – making as personal an impression as possible with that agent and his or her client. Connections matter in this business, and when sellers have multiple offers to consider, they’ll often go with the buyer they connected with the best.
Also, offers on properties was not the only good news in Redfin’s study. It also found that 28 percent of its respondents believe that now is a good time to sell, up from 13 percent in the first quarter of 2012; that 58 percent believe 2012 prices will increase, up from 34 percent last quarter; that 63 percent cite low interest rates as the reason to buy now, the most popular rationale by a large margin; and that 58 percent said they were “very interested” in conventional sales, up from 48 percent last quarter, a strong suggestion that demand may be broadening beyond cheap REO properties.