Now Tracking How Many Offers We Receive and …
A common question today from buyers is what should I offer? Traditionally, this was all about looking at prior sold properties and justifying what was a “fair market value” for the property. Today, the price a buyer is willing to pay for a property is more subjective and is based on the following three things. One, how many offers are expected to come in or have come in on the property? Two, what is the buyer’s financial ability; and three, how badly does the buyer want or need to complete the buying process and secure a home.
To help our buyers, we have now begun to track the number of offers on our listings and the amount over the list price that we are seeing homes sell. Now, before you take these numbers too seriously, we at ELEETE put a huge emphasis on home preparation, accurate pricing, and finally, we invest in a multimedia marketing campaign with stunning photography, video, and websites. So, we do everything in our power to put our sellers in the position to be the recipient of multiple offers.
For the past two weeks here is what we have seen with listings at ELEETE:
- Week 1: 10 New Listings; Average 5.5 offers; Accepted offers 6% over the list price
- Week 2: 12 New Listings: Average 7.6 offers: Accepted offers 17% over the list price
For buyers, these numbers are daunting, but they do help in keeping expectations realistic. Most commonly, the buyers who wrote the winning offer have a need that exceeds logical value based on comparable sold properties. They are living in temporary housing, have the financial ability, and they have lost out on countless other homes leading up to finally writing the winning offer. What we really need to track now, is how many offers a buyer will write, until they finally secure a home. At ELEETE, my guess today is that the number is around five offers on average.
If you own a property, especially an investment property, the question becomes, when should you sell? We all thought after the 7-year economic boom beginning in 2012, that the bubble could burst any time. Then came the pandemic which, surprisingly propelled the housing market further. And of course, based on all the political rhetoric, the economy was going to collapse based on new Democratic administration. Well, none of that happened and here we are with record setting stock and housing markets.
As real estate professionals, it has been tough seeing our buyers priced out of the market, while at the same time seeing our sellers reap windfall returns. With a robust 9-year up cycle, there is no change in sight despite the global social, political, and economic turmoil we are experiencing. Buyers will need to be prepared for tough competition in the foreseeable future while sellers continue to earn record returns.
