Hello and Happy Valentine’s month! It’s February 2022, so as you know, it’s time for another Lochwood Market Update!
I’m sure you know by now that I’d LOVE ❤️ to be your realtor should you decide to make a move, and the person you call when you have any questions related to real estate. Now that I’ve gotten my cheesy Valentine’s marketing out of the way, let’s get down to business 😀
Spring doesn’t officially begin until March 20th, but in terms of real estate seasons, spring market is here! Four of the six Lochwood homes that sold in January went for 100 percent or more of their original list price. Year-over-year, days on market were down 75 percent and pending sales were up 33 percent. Closed sales were down, but that’s because there were fewer homes available for purchase. We are seeing this across the Metroplex and much of the US for that matter. As of the writing of this letter, there were only seven Lochwood homes listed for sale. Seven! That’s historically low!
In other industry news, interest rates are up. So far, the rate increases haven’t effected the number of people submitting mortgage applications for purchases, but applications for refinance are down. Rates are up because the economy is stabilizing, the labor market is strong, and inflation is up but expected to come down later this year. Economists expected interest rates to get to 4 percent by year-end 2022, but we’re in mid-February, and they are already a hair over 4 percent. Rate increases could have an impact on buyer demand in the future. I will keep an eye on mortgage applications, a leading indicator for buyer demand, and keep you informed.
Home builders are working as hard and as fast as they can to bring new homes to the market; however, new construction is unlikely to add much inventory to our supply because many builders have long lists of buyers waiting to get their hands on a new home. I know because I’ve helped a few clients search for and secure newly built homes in the past few months.
iBuyers and you
This is all very positive news for home sellers! It’s such positive news that I am baffled as to why some of our neighbors decided to sell their homes to iBuyers! An iBuyer is a “real estate company” who offers to buy your home for cash when a homeowner asks for an offer, oftentimes through their website. Open Door, Orchard and Knock are a few of the iBuyer signs that I’ve seen in the neighborhood.
Cons of iBuyers
Homeowners are often lured into selling to iBuyers through their advertising efforts, which tout fair market sale prices and convenience, but here’s the truth about iBuyers. First, the seller definitely pays for the convenience of selling their home to an iBuyer. Oftentimes there is a “convenience fee” charged to the seller which is much higher than they’d pay a traditional broker to list their home in the MLS.
Second, how do you really know you’re getting a fair market price for the home if you haven’t actually taken it to market and exposed it to as many buyers as possible? A buyer who has been looking for a while and lost out on other homes may be willing to pay more for your home.
Third, the iBuyer representative doesn’t work for the seller or represent the seller’s best interest, they’re working on behalf of the iBuyer.
Lastly, it’s not as though selling to an iBuyer saves the seller money on making repairs to the house. The iBuyer is still going to do an inspection and ask the seller to make repairs prior to closing, or reduce the contract price of the home in order to make those repairs themselves. The bottom line is that homeowners who sell to iBuyers end up putting much less money in their bank account. Especially when compared to homeowners who list their home with a traditional broker, like me!
Recommendations / Conclusions
If you or anyone you know have been kicking around the idea of selling to an iBuyer or any of the investors who are calling, texting and knocking on your door, please give me a call for a second opinion. We can review comparable sales and market value, discuss potential repairs and repair costs in detail, and I will give you a detailed breakdown of how much money you will walk away with after closing the sale. Then, if you’re still intent upon selling to and iBuyer, let’s talk about the iBuyer program that Coldwell Banker offers.
It’s called Real Sure Sell and there is more information about it at the bottom of this blog post so that you can review the program for yourself. Essentially, Real Sure will give you a cash offer for your home and allow you to put it on the market to see if you can get a better price. Their fees are also much lower than the iBuyers I referenced above. I don’t know of another iBuyer that offers that kind of deal, and I think it’s another example of how working with an industry-leading broker works to your advantage.
That’s all I have for you today. I hope you’ve found this information helpful and informative. As always, you can call me with any real estate questions that you have. My goal is to be your trusted real estate advisor, and I’d love to hear from you.
I will be in touch next month.