It’s been hard these past few months to write my column — or even keep up with the real estate news — because I’ve been so busy working with buyers and sellers and selling real estate.
Selling real estate probably isn’t as glamorous as writing about how to sell real estate, but someone has to do it. Right now business is good in many markets, especially as compared to last year.
This year is so different from last year or the year before, and I know other agents are feeling it too. I work in a market where there is a shortage of homes to sell. Some homeowners would love to sell but owe more on their homes than they are worth so they are keeping them off the market.
Buyers are looking for bargains. It feels like they have gotten more patient. They are willing to wait for the right house, and they are determined not to pay too much.
Last week I spent hours going through lists of homes that my buyers found and were interested in looking at, only to find that they already have offers on them.
Our multiple listing service has this special status that can only be seen by Realtors for homes with offers on them that are contingent on third-party approval, which all short sales are. When buyers see these listings, they can’t tell that there is already an offer on them.
About 25 percent of the homes on the market have offers on them, but are either waiting for third-party approval or have some other contingency on them. Right now this is making my job difficult. I spend time weeding through homes that buyers are interested in but can’t buy, searching for the few houses they could buy.
Buyers are frustrated with their limited options. This past weekend I was involved in yet another multiple-offer situation where my buyers had to decide if they wanted to get into a bidding war. This is all so different from last year when business was so slow. But it’s also different from the multiple-offer situations in the mid-2000s, when it seemed like homes would appraise for whatever the buyer offered.
Even though there are shortages of homes in some price ranges, there are homes on the market that no one wants, and some that need a lot of work. There are also overpriced homes that no one will buy.
The combination of higher rents and fewer homes on the market should drive home prices up, but I don’t think they are going to get high enough to help the folks who bought homes when the market was at the peak.
I still meet with sellers who cannot sell because they owe more on their home than it is worth. Then there are those who refuse to sell because even though they have equity, they don’t want to "give the house away." They are keeping their homes off the market until prices go up.
Short sales make up a significant portion of the market, and cannot be ignored. More of them are resulting in closed sales, and are necessary for both buyers and sellers.
I recently represented a seller who had two liens on his home, but was still able to negotiate a short sale with both lenders and the sale actually closed. I am not sure I want to do it again because of the enormous amount of work and responsibility. The seller walked away with money in his pocket because of the incentives being offered by one of the banks.
There are agents who lack experience with short sales who are representing sellers, which is a shame, because their mistakes can cost their seller the opportunity to sell short.
Representing buyers is another matter. We just need to tell them what to expect, ask the right questions of the listing agent up front, and then write a clean offer and wait it out.
A couple of weeks ago one agent told me that he only wants to represent traditional sellers, and that he did not get his real estate license to work with distressed properties. There are a lot of agents who feel that way, and I empathize.
Foreclosures and people looking for places to rent also continue to be a large part of the real estate market. As agents with daily contact with buyers and sellers, we usually know what is happening in the market long before the news media reports it.
The local news media is making a big deal out of home prices increasing three months in a row. They don’t understand that real estate is seasonal and home prices are almost always the highest in the spring and early summer months.
Every year for the last several years in the eyes of the media the housing market hit bottom in the winter and is followed by a recovery every spring. I will predict that home prices and sales will be lower in the fall and winter in my market than they are now. It happens every year.
Real estate is local. Please let us know in the comments what is going on in your market.
Teresa Boardman is a broker in St. Paul, Minn., and founder of the St. Paul Real Estate blog.
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