As temperatures rise here in Colorado, tempers are rising as well across Metro Denver, resulting in more than 20% of winning offers falling through on property listings across the city. So what gives? In a real estate market as hot as Denver's, the stress of scoring a home has become very real for buyers; and some sellers see the shortfall in available inventory as an opportunity to cash in – adding pressure to a frustrating situation for buyers.
TRELORA experienced the beginning of this trend in March; particularly in lower, more affordable price points (such as below the $300k mark), there are even fewer homes to choose from. Buyers in need of housing are sometimes offering more than list price in an attempt to clinch the deal, but things fall apart when the appraisal doesn’t hold up and the buyer doesn’t have the cash to cover the difference. Know this: no matter how badly you want the house, the bank won’t lend you more than it’s worth according to the appraisal value. If you can’t cover the difference and the seller isn’t willing to lower the contract price, the deal will probably fall through.
One of the best ways to deal with an uber competitive real estate market is pretty simple: Expect the unexpected. Buckle your seat belt and know that turbulence of one kind or another is not only likely, it’s practically guaranteed.
Tips for Buyers
Buyers should have a thorough understanding of their home finance situation: how much mortgage they qualify for, how much down payment they can bring to the table, what their monthly payments will look like at varying price points within their prequalified loan amount, and any additional costs associated with the transaction. If you are well informed and remain objective about the numbers, it will help minimize the swell of emotions you experience when you think you’ve found “the one.”
A realistic must-have list is crucial for buyers. You might like hardwood floors, but including this on your list of non-negotiables is unrealistic in this marketplace. Items like location, number of beds/baths and square footage minimums are realistic for your 3-5 point list of deal breakers; an aversion to carpet is something you will have to be flexible on.
Don’t balk at playing backup. Backup offers happen often in a seller’s market, and with more than 1 out of 5 deals falling through, the odds are good for buyers willing to be in a backup position.
Tips for Sellers
Sellers need to know their first accepted offer may not be their last. This may be a seller’s market, but that doesn’t guarantee a stress free transaction. Wait to pop the cork on that champagne until you leave the closing table! On that note – don’t be surprised if challenges arise close to closing day – or even at the closing table. Snafus happen; rest assured if you hired an experienced team to assist with the sale, they’ll back you up through closing and beyond.
Work with an expert home advisor to set the right list price. Aim high, but keep your feet on the ground. We want every seller to receive an ideal offer in a timely fashion. We aim to set a price that will survive the appraisal process, and we base our research-backed pricing recommendations on reality – not wishes, hopes & dreams. Sellers (and buyers) working with TRELORA pay a flat rate of $2500 for our services, not a lofty commission. These savings help people keep more of their hard-earned home equity and make listing your home in the current marketplace even more attractive. As a Denver-area seller, when offers come in (and they probably will – in spades!), resist the urge to pinch every last penny from the buyer. We want you to smile all the way to the bank – but chances are you can achieve that post-closing glow without grinding your market-weary buyer into the ground.
Tips for Everyone
Remember the Golden Rule. There is an active competition to snag the best deal // best house // any house in this market, but playing dirty spoils the game for everyone. Treat each partner in the transaction the way you’d like to be treated. Be fair, be honest and be prepared to come up against others who do not extend the same grace.
Buying or selling a home is a big deal and a potentially stressful proposition, no matter the market conditions. Choose to work with a team of professionals who offer the best technology, experience, transparency and communication. (Hmmm… That sounds a lot like TRELORA.) And while you’re at it, ditch overpriced commission fees (paying too much for real estate services will not get you a better house or a better deal).