For a small number of homes for sale, the competition among buyers can be intense. Chances are, when you finally find a place that suits you, you’re usually not the only one who feels that way – and your bid is going to compete with several others for a seller’s attention.
As we review the sales numbers for February 2018, this is something to keep in mind. If you are going to compete successfully in this market, understanding the data is important. Once you know what you’re up against, putting together a strategy is the next step.
“In God we trust, all others must bring data.” – W. Edwards Deming
Through the first two months of 2018 single family home sales were 2.1% ahead of last year. Below you will find a comparison of most towns in the greater Portland area – including both unit sales and median selling prices. Interestingly, York County sales were up 8.9%. Cumberland County, constrained by inventory, trailed prior year by 8.9%.
While the median selling prices are up through the first two months, February was the first month in the last ten that did not exceed $200,000 state wide. The February median price in Cumberland County, while ahead of last year, was at the lowest level since September 2017. The importance is to determine whether this reflects a softening in the market or is more a matter of the mix of homes that sold.
What do sellers want?
Price still remains the single most important factor to getting an offer accepted, but there are additional details that motivate sellers. For example, the amount of time it takes to get to closing is very important. While their home is on the market, the sellers are still paying their mortgage on the property.
As a result, most sellers want to get their homes sold as quickly as possible. Sales price is key, of course, but if two bids come in for the same amount, or are very close, then the sellers might be persuaded one way or another if one buyer’s bid has a shorter time to close than another.
Buyers also need to realize that many sellers spend a considerable amount of money preparing their home for sale. This work normally includes painting, floor refinishing, landscaping and staging, but can often include entire renovations of bathrooms and kitchens or replacing faulty roofs or foundations. Sellers can also invest several thousand dollars in inspections and contractor bids. Buyers feel stretched on bid prices and competition, but it’s helpful to keep the seller’s perspective in mind when compiling the terms of an offer, as sellers have often done a lot of recent upgrades and work to their property just prior to listing and this is often reflected in the final listing price.
There are three major contingencies that are part of most residential real estate offers. They are the loan contingency, the appraisal contingency and the inspection contingency. These contingencies are built into the bid so the buyer has the ability to withdraw from the contract if the loan falls through, if the appraisal value doesn’t reflect the loan amount or if an inspection reveals issues with the home. Finding creative way to mitigate the affect of these contingencies in any offer can make it more acceptable to the seller.