REALTORS® have a prayer: “Dear Lord, if I can’t be someone’s first love or second wife, let me be their third REALTOR®.” When there is a normal real estate market with a balanced supply of buyers and sellers, this describes the preference that it is better to be the third listing agent to help a seller after they have become more realistic about their listing price.
In the market today, this prayer may be reversed and be more about buyers than sellers. With more competition, the chance of a buyer having an accepted offer on their first home is largely reduced and it is only after they have lost a few bids that they become more aggressive in negotiations.
Over the last two years, competition for homes being sold has increased greatly according to the recent REALTORS® Confidence Index Survey from NAR. According to the NAR report, in April of 2021, there were almost five offers for every home sold and it was an increased from two offers in 2019 and 2020.
Utah reported the highest number of offers per home sold with seven while Arizona, Georgia, New Hampshire, and Washington had six. California, Colorado, Tennessee, and Texas each had five offers per home sold.
As a buyer, if you want to make a more attractive offer, make a cash offer, and eliminate any financing contingencies and reduce your chance of rejection. Cash offers represented 25 percent of the offers in April and 21 percent in the first quarter of 2021 compared with 18 percent in 2020.
Buyers who cannot make cash offers compensate by increasing the down payment or EMD amount. Nearly half of homebuyers are putting 20 percent or more down during the first quarter of 2021. We are even seeing first-time home buyers using an 80 percent mortgage to make their offers more attractive to sellers.
In 2021, the median days to sell in Fairfax, VA for January was 15 days. It dropped to 12 in February and has been at 6 days for March through June. Interestingly, we are just 1 day below the median for last July. Nationally, 31 percent of residential sales were to first-time homebuyers down from 32 percent in March 2021 and down from 36 percent one year ago.
While nearly 3 out of 4 homes closed on time, 5 percent were terminated, and 22 percent were delayed but eventually went into a settlement. Appraisal and financing issues were the major contributors to the delayed transactions. The two major factors for the terminated transactions were also appraisal and inspection issues.
Today’s environment requires a strong, sensitive agent who understands your goals as well as the intricacies of the market to be able to devise a plan to make it happen. I and my other professional recommendations are as good as boots on the ground and necessary whether you are a buyer or a seller.
I can provide Insider Information on Fairfax VA homes for sale. Get you a FREE Market Snapshot Report of Your Northern Virginia Home’s Value, or Search All Northern Virginia Homes For Sale. Put that data you need at the tips of your fingers!