Real estate prices are on the rise across the country, and typical buying practices won’t cut it as many sellers receive multiple offers.
Buyers and sellers in the Belleville area have been affected by a shortage of housing stock, and there is no single clause that guarantees acceptance of your offer.
However, there is an action you can take to improve your chances and stand out from other sellers’ options, real estate professionals say.
Here are some tips from a New Baden-based real estate agent on how to approach making an offer, as well as insight into the industry about selling during peak times.
uCan you put off buying now?
Angie Zahn, a licensed real estate agent and managing broker, said Belleville is a tough market for buyers right now, with most areas of the country favoring sellers due to supply and demand issues.
“Since we have a supply and demand problem, prices are off the charts,” Zahn said. “We are just in a strange, strange time. I have been selling real estate for over 30 years, and have never seen what we have now.”
One unique factor in the housing shortage in Belleville, Zahn said, is that the city is mid-season for military families who move to be near Scott Air Force Base.
Despite the challenges posed by low supply and high demand, Zhan said she still recommends buying for now, as the situation could get worse for buyers.
“For now with interest building in, and the expectation that it may pick up again, this is still a good time to buy,” Zahn said.
The interest rate for a 30-year fixed-rate mortgage is 5.37%, according to data from the Mortgage Bankers Association. The number is up 0.17% over the past 10 days, and 15-year fixed mortgage rates haven’t delivered increases.
How can buyers make competitive bids in this market?
Buyers’ approach had to change as a result of the seller’s market by directly offering their highest bids, with many sellers considering multiple offers simultaneously.
Those looking to buy may also need to submit pre-approval letters from lenders with their offers, asking for fewer extras and waiver of inspections in some cases.
“A lot of the market analysis I do now, it seems that sometimes homes sell for $10,000 or $20,000 or more than what businesses are offering,” Zahn said. “Everything except giving your firstborn child. That’s just how it is.”
Rising home prices have hurt buyers not only by forcing them to make concessions they wouldn’t normally make, but also by creating valuation gaps that prevent them from securing financing.
Lenders will only offer minimal appraisal pricing, Zahn said, and with Belleville homes selling for $10,000 to $20,000 over what is normally expected, some sales are declining because buyers are unable to bridge the gap between what appraisers say the home is worth and what sellers are asking.
“I try to educate buyers a little bit so they don’t take it personally when the fourteenth seller tells you ‘No, they’ve accepted another offer, and I’m not frustrated that you’ll find the right home,'” Zahn said.
For those willing to take guts in the buying market, Zahn said she recommends getting a pre-approval letter, making your highest bid and working with a professional real estate agent to manage your expectations.
While it can be easy to get caught up in the excitement of a purchase, Zahn said buyers should ensure they are making good financial decisions by working closely with the lender and getting advice from an agent about a potential return on investment.
How do you browse offers as a seller?
To avoid alienating buyers, Zhan said sellers should prioritize ensuring their homes meet legal requirements for government funding.
If you’re interested in selling your home, Zahn said you don’t have to tell anyone you want to sell until you have a plan for where to go. Your house may run out from under you, because potential buyers are bidding after one and even invisible.
Once you’ve received several offers, Zahn recommended balancing the terms of the offers on the table, including the cash offer, the financing plan, and any terms such as the assessment gap or waived inspections.
“Sometimes it’s not about the most money. Sometimes, it’s about the best terms,” Zahn said.
Flexible closing dates are often taken into account, and now is the time when sellers can pick themselves up on the most convenient selling insurance possible.
Meredith Howard is a service journalist at the Belleville News-Democrat. She is a graduate of Baylor University and previously worked independently with the Illinois Times and the Pulitzer Center for Crisis Reporting.