The Sellers Market Continues, BUT....

This may be happening in a suburb near you! Just this week I received 6 emails from local agents explaining that their listing is "Back on the Market". Usually that means that a prior deal fell through for one of various reasons. As the snow melts and daylight savings arrives this weekend, spring inventory should start to grow, lessening the shortage of homes for sale.

If you are following the market, you may notice that a property initially came on the market and there was a frenzy of showings in the first weekend. Buyers waiting on line in the freezing cold with their masks and gloves, ready to sign Covid disclosures to swear they are healthy or vaccinated. They take off their snow-covered shoes, put on surgical booties, use hand sanitizer, keep their distance, leave their kids in the car, and race thru the house for one-at-a-time showings, usually a 15 minute time slot, to keep the line moving. Two frazzled agents greet visitors at the door and try to keep everyone from getting close to each other, hoping they don't touch anything or lower their mask.

Agents are constantly checking email alerts for new listings, racing to set appointments, warning their buyers they can't use the bathroom or bring their children on viewings unless they are carried. Many homes have video surveillance. People prefer to show homes that are vacant, but if not, the owners/tenants are supposed to vacate for hours, so the house can be shown with fewer people and distractions.

Within a day or two, several buyers want to make an offer. Agents call and ask if the seller will cancel the showings and shut down the Open House and take their offer right away. Some sellers jump at the chance and others want to ride out the flurry of appointments.

Often buyers are being asked to accept the house with various conditions (known or unknown) regarding ages of mechanical systems, the chimney, painting that is needed, floors that may need finishing, you name it. Sellers do not want to be raked over the coals on home inspection issues. Buyers are given a disclosure statement, they see online photos and video tours and often there are KEY items missing from the disclosure and photos that appeared online, look little like what they are seeing in person.

Online pictures show front and back yards which have been drastically changed and enlivened with lush green lawns, now totally covered in piles of snow. There is no way to see the broken back steps, or front walk way, the rotting railroad ties, dead bushes and crumbling stone patio. Inspectors can't test the air conditioning, the sprinklers or see the roof. They have no idea about the basement window wells and numerous other tell-tale signs of poor maintenance. Many buyers need to move out of their small apartment, they want to get their kids into school, they need a yard, they want to take advantage of the low interest rates. They are having a baby and are tired of living with their parents! They wanted to buy last year but they got outbid or decided to wait until this year. They move forward and have no idea what is underneath that snow.

So here we are with a shortage of inventory and many sellers have too many at-risk people at home to allow dozens of showings to strangers. The lack of supply has ramped up demand that has been pent up since before Thanksgiving, when new listings typically dwindle down and sellers withdraw unsold homes for the holiday season.

Homes in many NJ towns, and all suburbs, in all price ranges are selling with many offers. Some bids are WAY over the list price with all kinds of promises for fast closings, waived mortgages or removed appraisal contingencies, promises to conduct inspections super fast, deliver the escrow deposit immediately and to basically jump through hoops so they don't lose yet another property to a stronger bidder.

Whatever the circumstances, we are hearing of many buyers who are paying WAY over the list price in multi-bid scenarios, rushing to conduct several inspections and then 2 to 3 weeks later, the attorneys get a LONG list of structural, mechanical and environmental issues, accompanied by outrageous estimates to make repairs and replacements of many items in the house. The tug-of-war begins.

Now the buyer has leverage that they did not have when they were bidding. Many of the other bidders are gone and the reality is that if the house has to go back on the market, these inspection issues that were unknown before, now must be disclosed. That can severely inhibit other buyers from jumping in when the house comes 'Back on the Market'. That is, if the actual deficiencies are disclosed.

Often the agent states that the buyer could not get his mortgage. That is another pitfall, but when all of the buyers come with pre-approvals, its hard to know what happened. How could they could not get a loan just a few weeks later? Perhaps they got sick, lost their job or the bank found out their do not have the liquid cash they expected, due to a drop in their portfolio or a change in their plans to receive gift money from a family member. Whatever the reason, many suffer from buyers' remorse when they realize they may have grossly overpaid for a house that needs much more work than they originally anticipated.

If you want to discuss these various scenarios and how to protect against a fall through and a HUGE and frightening list of inspection issues that can ruin your transaction. Get in touch today. Pre-listing preparation and accurate disclosures can mitigate against some of these surprises, not to mention seeing proof of down payment funds UP FRONT, before you sign on the dotted line.

I have sold over 1,000 homes in my 36+ year career and my company has transacted over $1.6 billion in sales and given over $110,000 to local charities. I can explain how the Towne Realty Group Listing Prep Advantage can assist you BEFORE you list, with no cost until closing. Feel free to text me at 201-417-1600 for a consultation.