sponsored post by Lauren Hruby and Scott DeVouton
2016 has jumped out of the gate, as we suspected it would. Last year was another seller’s market. Inventory and supply were both down double digits, but buyers were plentiful. Low interest rates and an improved job market helped bring about a very competitive market. We wondered how this would transition into 2016.
2016 has started out moving in the same trajectory. Closed sales were up by over 4% from this time last year, and days-on-market dropped over 12%. Inventory was down almost 32%. Supply dropped almost 40%. The homes that are being listed are selling fast, making it a potentially tough market for buyers.
Our buyer clients are finding that there just aren’t that many homes on the market that meet every need and want. Buyers who do find the right house are required to get offers in right away, typically after one showing, and typically by the night of that showing. Things like seller-paid closing costs, warranties and incentives aren’t the norm.
If you will be buying this season, a few things can help you get the house you want. We also have a note for sellers.
Pre-Approval. Every buyer should be pre-approved with a lender, or should have cash freed up and prepared to put toward the home purchase. Most lenders can get a buyer pre-approved or pre-qualified fairly quickly, so it will pay to get your financial house in order. Be ready with things like tax information and debt statements. Know your credit score. When your lender sends you requests for information, respond promptly and completely. In today’s market, it doesn’t make sense to start looking for homes before knowing how much home you can afford.
Home Searching. Every buyer should also start looking at inventory as soon as possible. It is easy to set up an automated search with your realtor (ours can be found at www.laurenhruby.com), so you see what’s out there and are immediately notified when something new hits the market. The better you know the housing stock where you’d like to buy, the more focused your search will be. The important thing is to be prepared to efficiently assess different homes when making an offer later on.
Prioritize. Prioritizing your wants and needs ahead of time can facilitate quicker decisions, especially if you might be dealing with multiple-offer situations. Right now, there are many multiple-offer situations. Those who are prepared to rank the many aspects of one home versus another can more quickly focus on offer terms, closing details and financing.
Dedicate Time. Once you have found the right home, it’s important that you are available to discuss details with your realtor, your spouse and your lender. Be prepared to discuss your deal at any time, especially if you’re putting an offer together or negotiating one that’s in place. Just the other day, we met a client at a restaurant, where they had to step outside with us to sign offer documents. The market is that competitive. Delaying an offer until the next day can mean losing out on the one home you’ve found that fits all your needs.
Understand the Risk of Playing Hardball. While it’s a seller’s market, the market still sets the price of a home. In Kansas City, unlike other parts of the country, we still do not see offers that are drastically higher than asking price. However, low-ball offers are not likely to be winners in this market. Seller-paid items such as closing costs, warranties, and some repairs may also knock you out of the running, especially in multiple-offer situations. This is not to say that seller-paids don’t happen in today’s market. It’s just that buyers should be careful about being too aggressive.
A Note to Sellers. Sellers, if you have read this far, we still advise you to be prudent when listing. You will probably not get top dollar for a home that’s not ready for market, has not been maintained, or is competing with similar homes that are priced for less. Kansas City is a busy market, but that does not mean it’s an unreasonable market. We always recommend all the home-listing basics, such as decluttering, repairing and refreshing. This can help you sell more quickly.
It’s almost March, and Kansas City is already in the busy real estate season. We expect this to continue through summer. If inventory increases, we could get even busier. Buyers, be ready. Talk to an agent right away, especially if you are thinking about buying in 2016, even if you don’t know what you can afford or what you might be looking for. Sign up for a home search, get your financial ducks in a row, and get your current home ready to list. In this market, it’s never too early to get a jump on things.
For anyone looking to know more about how we got to this point in the market, check out our 2015 Real Estate Recap. We wish anyone looking to buy or sell a home the best of luck in this busy real estate season.
Author’s Note – If you enjoy reading our Midtown KC Post articles, and might be buying or selling your own home, please contact us. We enjoy writing these, and love helping people.
Lauren Hruby Real Estate
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