Higher prices squeezing both renters and would-be homeowners” – MPR

Hot Housing Market: With Low Inventory, Prices Increase”-- KSTP

Recent reports of residential real estate shortages in the Twin Cities have led some to question whether this summer is a good time for a home search. Concerns about finding a new home or the potential of a bidding war have kept many families on the sidelines.  

Is waiting a savvy financial move, or simply buying in to media-fueled alarmism?

Takeaways:

  • Residential home inventories are lower than usual for this time of year

  • Getting your offer accepted requires attention to detail

  • A few best practices can help you get started 

The reality is that spring and summer are the most active real estate seasons every year. Even if listings are off by as much as 20%, the numbers of homes available dwarf those you’ll see later.

The total number of listings and overall activity favor acting now.  While relative inventory is low, there is still plenty of volume to make it worth your while. 

The key to capitalizing in a low inventory environment is to focus on a few key things.

1- Know exactly what you are looking for
It is no secret that an efficient search begins with a clear picture of what you are after, but in a hot market, a laser focus is even more crucial. A good agent will be able to help by asking targeted questions and marrying your answers with his or her knowledge of the area.

What emerges is a clear picture of exactly what you are after-- and where to look for it.

  • Engage an agent with deep experience in your search area
  • Spend time building a list of must-haves and nice-to-haves for both features and locations
  • Build your saved searches carefully
  • Know your budget


2- When offering, show up well 
Although it may seem counterintuitive, real estate isn’t always a bottom line business. Sellers confronted with multiple offers often seek out “low maintenance buyers” even if they aren’t the highest in offer price.

Other sellers may have different motivations and act accordingly. Hitting your seller’s sweet spot may require a little extra effort, but can make all the difference.

  • Ask your agent to carefully research the nuances of the seller and adapt your approach
  • Write an offer free from excessive contingencies (selling existing home, earnest money, inspection timeframe, inclusions/exclusions)
  • Come armed with a pre-approval for your mortgage loan

 3- Be flexible
The terms of any sale are always negotiable. A little flexibility by a prospective buyer can be the difference between landing your dream home, and an outright rejection. Again, the key is hiring an engaged buyer’s agent to do their homework to understand what matters to a given seller. By incorporating this into your offer, you can improve your chances.

  • Know your seller’s motivation
  • Consider a flexible closing date and terms matching your seller’s needs
  • Ask your agent to stay engaged even if your initial offer is refused

4- Consider a personal appeal 
There is a clear emotional component to selling a home. Sellers may have built wonderful memories in their homes, the idea of allowing a new family to do the same can be an external motivation that goes beyond dollars and cents.

Anything you can do to make a connection with a potential seller may tip the scales in your favor and could be easier than you think.

  • Consider penning a handwritten note to your seller
  • Include a picture of your family and outline in the letter what the home would mean to you

Despite the media reports about shortages, the housing market is active and inventory exists at all price points. The important thing to remember in this environment is to focus on the tactics that will help you act fast and make your offer stand out. A strong agent with local expertise can be the catalyst to make this happen.