Brought to you by Scott P. Rogers, Funkhouser Real Estate Group, 540-578-0102, scott@HarrisonburgHousingToday.com
Brought to you by Scott P. Rogers, Funkhouser Real Estate Group, 540-578-0102, scott@HarrisonburgHousingToday.com
Wednesday, April 14, 2021
Have you heard that home prices are on the rise? :-)
It usually takes about 45 days for a contract to get to closing -- and if this time frame weren't so long, prices might be rising even faster!
Here's why, with a few fictional houses as an example...
March 1 -- The owners of 101 North South Drive list their home for sale for $325,000.
March 3 -- The owners of 101 North South Drive sign a contract to sell their home after having received five offers, with some of the offers "over asking price" per the seller's agent.
March 20 -- The owners of 105 North South Drive list their home for $335,000 given that they had heard of the high levels of buyer interest in their neighbor's recently listed house.
March 22 -- The owners of 105 North South Drive sign a contract to sell their home after having received four offers, with some of the offers "over asking price" per the seller's agent.
April 1 -- The owners of 109 North South Drive list their home for $339,000 given that they had heard of the high levels of buyer interest in two of their neighbors' recently listed house.
April 3 -- The owners of 109 North South Drive sign a contract to sell their home after having received four offers, with some of the offers "over asking price" per the seller's agent.
April 15 -- The sale finally goes to closing for 101 North Shore Drive revealing a sales price of... wait for it... $340,000.
Wait a minute...
The owners of 105 North South Drive and 109 North South Drive would have **certainly** chosen higher list prices for their homes if they had known that the five offers on 101 North South Drive resulted in a contract price of $340,000!
And thus...
- Even if we see home values rising, they are likely not rising as fast as they would if we immediately knew what the winning buyer was paying for each house in a multiple offer scenario.
- If your neighbor recently listed their home and it is now under contract, you should see if you can sweet talk them into telling you the final contract price. :-) It will help us in pricing your home.
- When we price your home we will look at homes that have sold (closed) and those that are listed for sale (and likely under contract) but without knowing the final contract price of those homes that are under contract, we won't actually have a full picture of what a buyer is likely to be willing to pay for your home in the current market.
Which means that...
If you are pricing your home based on recent closed sales with adjustments made for the time that has passed from when those homes sold -- and if you are taking into account the list price of homes that are under contract plus any anecdotal insight into those contract prices -- we might still be in a situation where our reasonable list price results in multiple offers over that list price.
But, typically a seller in this situation isn't complaining to have multiple offers over their list price! :-)
If you are ready to get your house on the market in the next month or two let's start talking now and start tracking home values -- both those that are sold and those that are listed for sale and then quickly go under contract!
