Buying and Selling Real Estate in Today’s Market Requires A Strategy
During the show Mortgage Super Star and long time friend, Tina Mitchell, interviewed Joe and Jason for a 15 minute segment.
The topic of the interview was, “How To Buy or Sell a House in a Super Charged Sellers Market”.
We talked about topics like:
- What makes a surging seller’s market
- How to buy a house in a seller’s market
- What a buyer should expect for an agent and a mortgage professional
- How to market a listing
- What contingencies are
You can listen to the interview below or read the transcript.
Listen To The Money Hour Interview
How To Buy or Sell a House In A Sellers Market Interview
HOW To Buy or Sell A House In A Sellers Market INTERVIEW TRANSCRIPT
You’re listening to the money hour with your host Tina Mitchell, on Alternative Talk AM 1150, now back to the show with local mortgage and finance expert Tina Mitchell.
Welcome back to the Money Hour with your host and mortgage expert Tina Mitchell right here at 1150 AM kknw its the Saturday April 1st show. I am dedicated to my listeners providing you with the tools needed to make informed decisions on matters that affect everything regarding your money if you’re hearing my show at a different time or day you are listening to a rebroadcast but you can always call the show at 1-855 400-1150 or go online at themoneyhour.com to ask any questions or get connected with the guests that I have in studio today.
Right now I’m gonna have a conversation with Joe Kiser and Jason Fox about how to buy or sell a house in a surging Puget Sound seller’s market. Thanks guys for joining me in studio for the first time.
[Joe and Jason]
Thank you for having us.
A little bit about Joe and Jason, they work together as a team at John L. Scott real estate. They specialize in residential real estate in the Puget Sound area. Joe has been a licensed real estate producer for many years and a perennial John L Scott production award winner. He was born and raised in the Edmonds area and loves to ride Harley’s.
Jason has over 10 years experience with real estate marketing and pulls out all the stops when marketing a home. He was born and raised in Everett and loves spending time with his three children.
Our topic for our show today is how to do real estate business in a supercharged seller’s market and man what a supercharged seller’s market that we’re in.
Jason What Makes This Market A Surging Sellers Market?
The first thing we want to look at or I would look at is doing an eye test. If you’re anything like me you probably are watching your neighborhood and you’re kind of looking for for sale signs and your kind of watching to see how often they go up and how quickly they come down. You might have noticed that recently probably fewer for sale signs are going up but when they do go up they come down a lot faster.
Beyond the eye test is the actual data and what the data tells us is that right now we have approximately .7 months supply of inventory.
That is crazy.
It is crazy. And what that means is that if nobody were to list their home over the next say two weeks we’d run out of homes to sell.
The norm or the neutral point is approximately six months, so they say anything under six months is a seller’s market. You can see that .7 months is pretty hot.
I had just heard that in King County, just King County single-family homes and condos combined together were about 18,000 total units. And what you just said in months left of inventory, that is less than 18,000 properties, so it’s huge.
Joe does this mean that buyers in this market are out of luck?
It sounds like it to listen to those statistics for sure, but no absolutely not. What it means is that it’s actually a great time to buy, ironically. We’re kind of in a perfect storm.
First of all we still have significantly low interest rates so you know money is still really affordable.
In addition to that the media is really shining a light on how competitive it is out there and buyers are just plain beat up and tired. They’ve been working with agents that maybe don’t know how to navigate in this in this type of a market and they’re tired of throwing money at pre inspections. They’re tired of having their offers not even being looked at or not knowing what happened so they’re getting out of the market a little bit.
They are getting out of the way for people that are buyer ready day one. That are ready and have an agent that knows how to navigate through it.
We also have a seasonal thing right now as spring comes people start to get ready to sell their home. We’re starting to see inventory pick up a little bit, and any move is really significant with what we’ve been facing the last couple of months.
When you have the media talking about this seller frenzy and there’s not enough inventory people that weren’t going to sell maybe for 2 or 3 years are all of a sudden seeing the need to sell right now.
With spring coming and that natural tick up of inventory and the influx of homes from people that maybe weren’t going to sell for a year or two that really want to capitalize on the market. That’s going to make it a lot better for buyers getting in the market today.
Yeah, I love how you say navigate through the process and that’s why it’s so important to work with seasoned agents that understand how to navigate the process. That’s the whole reason for the show and why I have guests like you guys in studio.
Jason, part of the navigating through the process I would imagine is really being able to have the activities that you need to do to prepare and get ready. For my buyers listening to the show what advice would you have for them right now?
You know what you want to do is just hop in your car and kind of drive until you see a for sale sign. No not really.
What we’re going to suggest is you find a knowledgeable agent like you pointed out. We have a phrase we use being buyer ready day one, and what does that mean?
The first thing is you need to be ready to move quickly and when we say that we don’t mean making a hasty decision buying a home. When you do get out there and you find a home that you love and you say okay I want to buy this house everything’s going to happen real fast right now.
Because we are in this market it’s really important to be mortgage ready day one also. Which you can speak on, Tina, but it’s also really important to kind of understand the buying trends and what’s going on in the market today.
In addition, having a buying strategy were you sit down with your agent and get an understanding of things like location, condition, and price and what that means with your buying power.
Also putting together a wants and needs analysis. Oftentimes there’s a lot of things we want in a home and we kind of go out and start looking and we realize that there’s some things we absolutely need.
It sounds like the preparation is key to being buyer ready day one. It’s stepping back and getting everything prepared upfront and understanding, like you said, knowing what your needs are what you’re willing to give up. Whats the maximum that you’re willing to go into with these multiple offer scenarios.
If you can do that then you’re ready to go. You’re just running with your best foot forward and if it doesn’t work out you don’t quit the fight you just keep on fighting
Joe I know lending is a big part of it, being that that’s what I do, and your lending partners is a huge part of it. What do you tell your buyers that they need to be asking from their lender to be able to be ready in this market?
That’s a great question Tina, you are the one that should probably be the one answering, but when I get started with a buyer I let them know that the lender is one of the most important keys to this whole process. That they need to be mortgage ready day one.
They need to understand that there is a difference between going online and getting a pre-approval letter and actually being fully underwritten or even approved. They need to be a working part of the whole transaction, they need to be able to be available.
One of the things that I do when I’m in a multiple offer situation, I kind of already understand the financing, but once we’ve submitted the offer it’s nice when the lender can go ahead and do some due diligence and give a call and verify the strength of the financing. It’s one less thing that the that the sellers agent needs to worry about.
It happens all too often where somebody has this pre-approval and they go out there and fall in love with a house and they get their offer accepted and then find out that the lender didn’t do the due diligence and the deal falls through.
Yes, a working part of the team from the very beginning and I will speak on this since you gave permission for me to do. This is what I do it’s crucial I know timing is important as well. Making sure that your lender is able to close in 30 days or less. What does that mean? You can have a guarantee on your closing which I do, and financial backing to ensure the loan closes on time.
You mentioned financing statistics and the last time that I saw thirty percent of mortgages fall apart because of the financing. They are actually pre-approved and then the mortgage falls apart.
Having some type of financial commitment, which by the way I have 5,000 to guarantee that the seller financing is not going to fall through because of something that the buyer did like they lose their job because if they lose their job they’re not going to get a loan, there should be financial backing.
It’s critical that they are accessible, and when they are accessible. You’ve got to be available to make those calls the for the listing agent on the weekend or the evening, as soon as that offer is getting submitted and say I have got a great buyer, you can rest assured we’re going to get the job done on time.
I think having somebody local is important as well. They’re building that relationship with your Realtor. I guarantee you the lending partner that your agent is introducing you to they are a part of their team and it’s critical for them to have those power partners together to make sure the process goes well.
Trust them you’re hiring your agent for their expertise. Which is part of, who do you need to work with in the process to pull that team together.
Joe what are buyers asking of their agent?
Hopefully they’re asking a lot of their agent right now. The day of having a day job and being a part time agent should be gone. As you can see there’s a lot of variables that come together.
If I had to boil it down it would be a local expert someone that understands the market and the area in which your family’s trying to move to.
A good negotiator and there’s a lot that goes into that. People think if they are approved for way more you can just put in a higher offer. It is more than just the highest amount.
You need be a good communicator. When I’m getting ready to submit an offer there’s a lot of phone calls I make. You start by talking to the seller agent and finding out what’s enticing to the seller.
Have strong market knowledge and again a full-time commitment to their clients. Not being over committed.
I say for real estate agents it’s experience, expertise, and reputation that’s going to make or break the process for you.
Joe in a multiple offer situation how are you helping your buyers navigate through that?
First of all you’ve got to understand contingencies and the power that they hold for negotiating. You have to start with letting the clients know that this is normal everyday business, and this is what we see in every offer.
To not be scared about it, to understand what the needs and what the capabilities of the sellers are so that you put your buyer in in a situation that’s optimal. Not over committing them just preparing them is the biggest thing.
Understanding the powers you have with different contingencies and being able to explain what escalations are.
Being available to make sure that they understand the process that they’re in and try to remove the fear.
You mentioned fear and I love that, Joe, because a lot of buyers they don’t do this every day so they have really no idea what it is like getting in the market. Letting them know you know this is normal, this is normal in this market and here’s the benefits that you’re going to be receiving from getting into this crazy market.
Jason what does this market mean for all of my listeners that are thinking maybe I should sell?
In a nutshell, it’s the best time to sell. I don’t want to sound like the stereotypical sales person, now is always the best time to sell.
As you know, with all the data that we’ve shared and the fact that today literally is April 1st which is, according to Zillow the very best time to list your home.
This could quite possibly be the hottest sellers market we’ve ever seen.
When selling your house I think there’s two things that people are kind of concerned with. They want to get the most amount of money and they want to do it in the quickest amount of time.
This market is going to afford both of those.
Exactly. The other key thing as most sellers are looking at moving up and buying another home, and the majority of them are. Joe you mentioned this, we always have a market that is short money, short sellers or short buyers. We’re short sellers right now. We have tons of low cost money to get into a mortgage.
What’s going to happen mr. seller, if you’re thinking of selling your home, when the interest rates go up to six, seven, or eight percent which they will. It’s going to be a whole different dynamic. You’re not going to be able to or it’s going to be a lot harder so now is the time.
Joe what do you mean by contingencies can you talk about that a little bit?
The short of it is a contingency usually is used as protection when a buyer is putting forth an offer. It’s kind of a fail-safe that they have after the offer is accepted. They get to actually do some due diligence to make sure it’s really what they want.
In this market it actually provides a little peace of mind to the sellers because instead of using it as a a buyers protection, it is often used now as a negotiation piece.
People are waiving certain contingencies, for example they might be waving their inspection contingency. In the event of a short appraisal they will agree to bring in cash to the table so they’re waving their financing.
It really is something that can be a double-edged sword right now.
Yes. It’s as you said earlier it’s just knowing what those contingencies are what you’re willing to give up to get that home.
Jason how do you get a listing maximum exposure?
As we kind of talked about
in the bios my background is real estate marketing and helping real estate agents with their marketing.
I’ve known you for years and all of your expertise in that arena.
That is what I’m bringing to the table. What we like to do that is kind of unique is our Listing Launch
We are going to make a big deal out of your home I mean and we should because it is a big deal. It’s a big event for everybody.
We’re going to talk about if we’re going to do some staging, or if it’s necessary. We’re going to hire a professional photographer to do HD photos and a 3d virtual scans for all of our listings. Open houses Saturday and Sunday.
We are going to include the neighbors, we’re going to canvass the neighborhood to invite them. Statistics show that seventy-six percent of people that move into a neighborhood were referred by a neighbor or a family member. That is a good referral source to take advantage of.
We’re going to blast it out with postcards, email, and social media. We’re even going to build your listing or your home a website.
We have a unique marketing plan for each listing.
I think that is important because a lot of sellers may think spending that extra energy, expertise, and time and how you market for the maximum exposure really isn’t important because there’s tons of buyers and we’re gonna have people just knocking at our door to get the house.
The real truth is it’s all about what you said earlier, it’s about maximizing the profit. You want to bring in as many buyers as you possibly can that are going to bid that home up ultimately getting you the highest profit.
When Is The Best Time To Sell
The best time to sell we talked about it is Right Now. Zillow says it is right now, statistics say right now, interest rates are low, rates are going to go up.
You can get into a new home and take advantage of these great rates get the top dollar for your house get multiple offers. It is just a great time, great time for sellers and a great time for you buyers out there as well. You just can’t give up you got to get out there fight the fight and take advantage of the low cost of money right now before it increases.
Thank you guys so much it was an awesome conversation with you. I really appreciate it.
[Joe and Jason]
Thank you Tina.