Mortgage rates continue to be at a historic lows and housing prices have reduced between 10% to 50% in the Metro Detroit Real Estate Market over the past 10 years. These are two positive things for home buyers, but one thing consumers must be aware is, the inventory of homes on the market has been reducing consistently over the last few years. So what does this mean when these two fronts collide of reducing inventory and more home buyers coming into the real estate market? Here is your Sales 101 Lesson and your answer to this question: When inventory is lowered and demand is increased, the value of the item increases. If the demand is lowered and inventory increases then the items price is reduced.
I have seen this all to often, with some of the buyers I am currently working or have worked with over the past year. Sometimes it takes one or two homes for a buyer to lose out on to realize that if a home is priced right, in good condition and good location, the seller will often be able to get their asking price if not be able to get very close because the inventory is low and the demand is high for homes like this. The days on coming in with an offer 5%, 10% even 20% below the asking price or list price are long gone if the home matches all three of the criteria I mentioned above. If the home matches all three of these criteria, very often the home will usually be sold within the first couples of days if not in the first 30 days on the market.
For a buyer that feels that they need to get a home that is 5%, 10% or 20% below the listing price, then be prepared to make a concession on the home you want to make an offer on such as the home may not be in good condition, may not be in a great location or has been on the market for a long time since it is over priced.
Let my experience work to your benefit. I am speaking from over 70 million dollars of real estate experience and 800+ residential homes sold in the Metro Detroit Real Estate Market. If a home is priced right, in good condition and in a good location, there is no reason for a seller to accept anything less or much below their listing price. If you want a home that matches all three of the criteria above, then be prepared to make an offer fast and close to if not list price offer and in some multiple offer situations, you may have to offer above the listing price in some situations. If you are not prepared to be aggressive and come in with an offer like this, then be prepared to not get the home your writing a purchase agreement on and be ready to ride the emotional roller coaster of missing out on the home you want. Just keep in mind, there are dozens if not hundreds of home buyers that are looking for the same home you are searching for right now.
Everyone wants a good deal, but just remind yourself that even if you have to pay the asking price for a home, you will be saving tens of thousand of dollars with the low mortgage rate you will be getting and you will get the home you want.