Alexandria VA Homes For Sale Getting Multiple Offers In A Down Market |
But I Thought This Was A Buyers Market
As the banks continue to drip foreclosures and REO (real estate owned) listings throughout our Old Town, Del Ray, and Kingstowne Alexandria market, I'm finding that many first time buyers are caught off guard when they learn that they have to compete for homes for sale in a supposedly down market.
Just like in the steamy sellers market when builders couldn't build 'em fast enough, we're seeing another lesson in supply and demand actively play out now. When the prices come down, more buyers come out, including cash buyers and investors, and there goes the level playing field.
The $350,00 and under market is the 'sweet spot' where you'll find the most sales activity. But since these first-time buyer bracket homes are now being absorbed, these traditional sellers are now able to move up, and we're seeing more absorption in the $350,000-$550,000 market. And believe me, move-up sellers want as much money as they can get...just like the banks!
Here are the biggest obstacles that buyers face that may count as a strike against them when competing in a multiple offer situation:
- Low earnest money deposit - True, the minimum down payment requirement on FHA loans increased from 3% to 3.5%, but many buyers still have little savings to show up front when writing an offer. The earnest money deposit won't be cashed until after your offer is accepted, but many times buyers forget about the upfront costs (even if a seller is contributing toward closing costs). These costs include home inspection, radon inspection, appraisal, and insurance.
- Unknown lenders - Real estate agents know that a reputable lender will be accountable and responsive, and an experienced lender will likely do a better job at preparing the home buyer for their mortgage. In a case where there's multiple offers, a good listing agent will also seek information from your lender to determine where you are in the mortgage application process. If your lender can't be found, then it could cost you the house.
- Hesitant to make a competitive offer - Old Town Alexandria and Kingstowne foreclosures and attractively priced traditional resale homes, will likely be sold within two weeks time on the market. If the listing agent discloses that there are multiple offers on hand, more than likely, an offer below the asking price will not be in the running. While it's true that if your offer has very favorable terms, like a high earnest money deposit and no contingencies it will move up the pile, a low offer with lots of contingencies and a request for closing costs assistance will not be as attractive to the seller or bank.
This year, with the continuous changes in the lending guidelines, new developments in the appraisal guidelines, and dealing with Alexandria VA short sales and foreclosures, there's been a lot for real estate agents and consumers to adapt to.
In a buyers market, the buyers may have more choices, but making an uninformed choice can be costly as well.