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Challenges for home sellers in a seller’s market

The real estate market is currently considered a seller’s market almost throughout the country – especially in Washington State. Seller’s markets create additional demands on homebuyers in general and first-time homebuyers in particular. Most people don’t realize that it also creates unique challenges for home sellers.

Tough questions that home sellers must answer

It is challenging for home sellers to figure out how to:

• Make their home presentable to fetch the best price 
• What needs to be fixed up 
• How much to spend on these repairs
• How to price their home just right
• How to choose the best offer

 

Short supply and high demand

There are so few homes for sale – and so many buyers. This basic disparity in supply and demand has resulted in a new trend. Homebuyers offer substantially higher than the asking price. They also waive several of their rights, thus giving up the protections provided to them by law. Most real estate brokers, eager to make a sale, neglect to help their clients fully grasp these tactics’ dangers.

Negotiations to deal with buyers’ concerns after the home inspection, appraisal issues, and other escrow-related matters follow this phase. These add to the challenges for home sellers. There are many pitfalls in each of these phases – each can be costly. It often gets pretty stressful. 

It is no wonder that more than 97% do this with a listing broker’s help. An insignificant number tries to go it alone. More than 70% of that minuscule number ends up hiring a listing broker. That has its own downside due to the property’s initial exposure to the market was less than optimal. Get BN Real Estate in your corner.

 

Abandoning rational thinking can be very costly for homebuyers

This abandonment of rational thinking by homebuyers also creates challenges for home sellers. Some of these challenges are:

1. Listing brokers often list homes based on their assessment of the home’s market value. The house often does not appraise for the price sold if that number is tens of thousands of dollars higher than that number. This can result in the transaction not closing.
2. Homebuyers may waive their right to have the house professionally inspected. When the offer is accepted, they try to find other ways to check things out. Sellers have to deal with this nuisance.  
3. If a transaction falls through and does not close, the listing comes back on the market. That is always a challenge. It is not a new listing anymore. Buyers ask more questions, and it is often difficult to get the price that the house originally sold for. 
4. If the appraisal was lower than what it sold for and the sale does not close, the seller can only expect to get the lower price now. 
5. It is not unusual for a listing to get multiple offers. It has also become common practice for buyers to include an escalation clause in the offer. Escalation clauses are complex and tricky to present correctly and even more complex for the sellers to decipher accurately. Often even the brokers do not fully understand the proper use and deciphering of an escalation clause, leave alone explain it to their clients. I will write a post about this separately.

 

More tough questions for home sellers when selecting the best offer

For offers that are significantly higher than the asking price and have one or more buyer’s rights waived, home sellers must consider the following:

1. What are the odds that the house will appraise for that amount? 
2. Are the buyer’s financials strong enough that they will be able to complete the transaction?
3. Are the buyers waiving their various having fully understood the repercussions? 
4. Is there any issue with the property that may not have been fully disclosed to the buyers and thus may result in a lawsuit at some future point?

This phenomenon underscores the need for home sellers to have a seasoned, knowledgable, forthright broker in their corner as a listing broker, and for the buyers, a buyer’s agent. Learn how BN Real Estate can help you.