Relevant Info in Today's Real Estate Market
As I read information about the rates being raised by the feds, and seeing the current real estate market, I am reminded of one thing. The market responds before lenders and the government do.
Simply put, real estate market activity responds to availability and demand much faster than the normal indicators do. All data and lending decisions are made in response to the condition of the market at least 30 days ago. So relying on dated information to make a decision today, might not be the best idea.
It is best to look at the current activity and longevity of a listing to make decisions on value. A good agent will do his best to price a property right, to stimulate activity, not to stigmatize it. Be careful not to get too excited and overprice your home because you think there is a bunch of buyers desperate to buy.
A simple example would be to analyze all comparable activity, then price at a modest growth number. Also realizing there may be anomalies in the market, (a unit that sold for an inflated price for some reason), and units in an area with very low inventory. When you run comps, throw out the high and low, then build your number from a point a bit lower then you anticipate value to be, (maybe 2% less).
Then be realistic about a time frame to respond. If you limit the process to only a few days, you are not being the most effective agent for your seller. Strong marketing, (make sure the listing is the best it can be with all the data, and good pictures/video) maximum exposure, and real information for the seller will guide them to a number that will be successful. In other words, promise a little, and deliver more.
It is best to treat both sides as if the market is balanced, be realistic with values, set limits with buyers/sellers and stick to that. Don’t encourage a buyer to spend more than they feel they can afford, or pay more than a property will appraise at. Be honest with sellers about value, don’t give them false hopes, if anything, let them be surprised if offers escalate.
As agents, we do have an influence on the market, if we work hard to be professional and real, we can keep the market steady and growing, instead of fluctuating up and down. It is our responsibility to manage our clients, and to protect them. Take pride in what you do, and don’t get caught up in the heat of the moment. People are trusting us with the biggest purchase of their lives, so take that responsibility seriously.
