Five Ways to Find Value in an Overheated Market
Tuesday Aug 01st, 2023
Buyers face a lot of competition in today’s overheated real estate market. They frequently find themselves in bidding wars for the few acceptable properties for sale. Being priced out of the market is a definite reality for buyers, unless they are working with a Realtor who knows the secret to finding value in an overheated market.
Here are my tips:
- Consider properties that have been on the market for a while.
If a property has been sitting for longer than three weeks, it is likely overpriced. The marketplace has clearly voted with its feet: “Not this property in this condition at this price.” There might be room for negotiating. Here’s where a proactive real estate agent can help. Making a call to the listing agent to determine their thoughts on why the property hasn’t sold yet, and whether the sellers are now willing to entertain a reasonable offer, can uncover hidden motivations and create opportunities for my buyers.
- Watch for listings that have gone past their offer date without selling.
Even in a hot market, not all properties receive the multiple offers their sellers (and agent!) had hoped for. Often the next step is to relist the property at a higher price that is truly indicative of the seller’s expectations, but until that happens, a disappointed seller who didn’t receive any offers could be ready for a “reality check” offer that gets the deal done.
- Find the value in properties needing cosmetic improvements.
In our “Instagram” world, the pretty properties sell quickly. In any beauty contest there is only one winner, so why not consider the runners up? People often vastly overestimate the cost of doing simple upgrades like flooring and paint, and totally underestimate the value of sweat equity. If buyers are willing to undergo the inconvenience and effort of doing some fixups, they can net themselves a home that perfectly suits their tastes. As a bonus, the property they bought will also have increased in its resale value. Talk about a win/win!
- Properties sold by the estate can be a good deal.
As your real estate agent, I have access to information about who is selling a property. If it’s an estate sale, I will know. These properties often offer good value to buyers because they a) may need cosmetic improvements (see point #3 above!) and b) they may represent “found money” to the estate trustees, frequently the departed’s loved ones. If presented with a reasonable offer with a quick closing, the estate may be willing to sacrifice a bit on the price to ensure a faster resolution to the property issue.
- Bank mortgage take-overs create a unique opportunity for buyers.
With the rapid rise of interest rates, an increasing number of properties are being sold by the mortgage holder after the seller goes into default. While it might seem mercenary to benefit by someone else’s misfortune, the road to recovery for the seller can only start with the sale of the property. Buying directly from a bank or a mortgage holder has some special considerations which warrant close examination. But as a seasoned Realtor with experience buying these kinds of properties, I can help you make a safe purchase that will create extra value for your future.
Buying a property is always a big deal, no matter where the source of the listing. Making a SMART decision requires an agent who will create opportunities for value that might be a bit off the beaten path. If you have questions about any of this content, reach out to Sharon at 416-460-5636 to start the conversation.