Here are my notes on buyer and seller activities in the current Seattle housing market:
Buyers:
1. There’s more inventory, so: Buyers want to see them all, and with so many homes on the market, it takes longer for folks to decide which house to buy.
2. Buyers want the best bargain, which is always true, but in this market, more likely to happen, depending on the seller’s situation.
3. Buyers are having more challenges with financing, which is why it’s more important than ever to have that pre-approval letter from the lender.
Sellers:
1. The situations are so varied for sellers.
Banks that are selling homes are interested in their bottom line and getting the collateral/bad loan off their books.
New construction deals depend on the financial strength of the builder, how close they are to the due date on their construction loan, and if they have money to cover the payoff. Also early sales in a condo complex or plat are not usually discounted, but the last few may be. They have to preserve their sale price because the sold units or homes become comps for the subsequent sales. If they discount early sales, they discount the whole project. The way to get a good deal is to ask for closing costs, upgrades, appliances or other perks like homeowner dues paid for a specific time instead of price. Is it the last one? You may get a screaming deal if the builder wants to be done with the project–and they usually do want that.
Sellers/homeowners: we look at time on the market, price drops they’ve already made and how leveraged they are in a mortgage. The seller will be easier to work with if the offer doesn’t cause a short sale of course, as then we add the lender into the negotiations. The lender will not okay a short sale until the seller is distressed and has missed some payments. A seller that doesn’t need to sell but can hold on and rent the house is not going to budge as much as a seller in dire straits. A seller with lots of equity has room to dicker, but may or may not be willing.
2. Relocations are often a pretty good deal, and often the seller has two mortgages or a mortgage and rent in the new location, so they are anxious to sell.
3. If the house has been on the market a long time and the price has dropped, the seller has already done alot of the price hacking for the buyer, and it’s best to honor that and offer near the asking price as long as the sold comps support it. They will be relieved to be working with a reasonable buyer and the buyer will be getting a good deal.
We work with buyers from all over the nation and world who have their own local real estate conditions and culture that they bring with them. One of our clients said that buyers ALWAYS offer 20% less than the asking price and then they usually end up somewhere between 3%-10% below asking price. Seattle is different. Statistics show that even in this buyer’s market the average sold price/list price ratio is within 0%-5% of the listed price, and an offer 10%-20% low often doesn’t even get countered.
This has frustrated some of our clients coming from other areas of the country, but the good news is that the real estate market in Seattle is still strong, and that as the nation recovers from the current financial turmoil, Seattle housing market will lead the way back up.
Lynette Hensley — Associate Broker
KING COUNTY
In King County, number of sales increased by 8% over January showing a seasonal rise, and also favorable market changes with some tax help for first time homebuyers.