Monday, September 17, 2012

Winning in a seller's housing market!

Winning in a seller's housing market

To their surprise, buyers in some housing markets are finding they're no longer in the power position.
(Money Magazine) -- When Paul and Ieva Johnson moved from Minnesota to Florida, they were looking forward to warm weather and plenty of bargain-priced homes. But when the couple made their first offer earlier this year, they quickly discovered that they'd have to settle for the sunshine.
Not only didn't they get the house, says Paul, but "we didn't even get a callback." Over the next two months they put in seven offers -- most at or above asking price -- before finally making a successful $365,000 bid on a Sarasota three-bedroom.

How to Spot a Recovering Market
If key local sales indicators beat the U.S. averages (as they do in the areas below), your market is probably picking up -- and prices will soon follow.
Metro Area Percentage With Drop In List Price Days Listed On Zillow Sale-to-List Price Ratio
San Jose 16.5% 51 1.01
Cheyenne, Wyo. 21.7% 88 1.08
Clarksville, Tenn. 30.6% 103 0.98
National Average 30.7% 113 0.97
NOTE: Zillow, based on June 2012 data.

To their surprise, buyers in some housing markets are finding that they're no longer in the power position. The reason is simple: too many bidders and not enough homes.
A growing number of shoppers are on the hunt, confident that the market has hit bottom, say brokers. Yet many would-be sellers are staying on the sidelines, either because they're underwater or because prices are still painfully low.
Related: Best home deals in the Best Places to Live
In June the number of houses listed for sale nationwide dropped 24% compared with the year prior, sending the supply of homes relative to buying activity down to levels not seen since 2006.
That's led to some stiff competition among buyers, says Sin-Yi Chao Lambertson, a broker in Glendora, Calif.: "I've had listings get 45 offers."
As the economy improves, the supply of homes should bounce back. If you're in the market now, though, and want to ensure yours is the winning bid, take these steps:
Size up your town. First you'll need to determine whether you could be in for a bidding war. Rising price tags are a sign that sellers are gaining ground, but prices often lag the market.
Related: Buy or rent? 10 major cities
Two other stats, available on real estate site Zillow, can mean an area's heating up: a drop in the percentage of homes with list price cuts, and an increasing ratio of sales to asking prices.
Don't skimp on credit. With many sellers worried about deals falling through, you'll need the bank's blessing right away. Don't waste time on prequalification, which is an estimate of how much you might be able to borrow.
"When multiple offers come in, I'll toss out anything that's just prequalified," says Teri Herrera, a broker in Redmond, Wash. Pre-approval based on your credit, income, and assets is better, and full credit approval, which goes through the bank's underwriting department, is best.
Lisa Ekanger Your Hometown Realtor!

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