Spring is here, and with it comes the annual springtime seller’s market! The national trend of low inventory and high demand have dropped the number of days for homes staying on the market and driven prices higher. Interest rates have remained low, which also provides further incentives for buyers to bid high to get the best deal as soon as possible.
The Following statistics have been sourced from MAAR: (View the full report here)
In the Twin Cities, for the week ending March 26th:
For the month of February:
A lot of sellers right now are all excited about the thought of receiving multiple offers on their home, thus driving up the sale price. This sure sounds like a good deal, but there is one real deal breaker lurking – the appraisal.
The appraisal is a tricky thing. If your buyer is getting an FHA loan, that appraisal will stick with your home for the next six months. This means, if it comes in low, that will be the appraised price for any other FHA buyer for the next six months. If you lose the buyer because of the low appraisal you need to either lower your price or find a buyer with conventional financing or cash. A buyer with a conventional loan may also run into a low appraisal but it will not be stuck with your home like an FHA appraisal.
Do you have other options if the appraisal comes in low? You sure do! You can keep that buyer and just lower your price to the appraised value. The buyer may be able to bring more cash to the table, or you may have a combination of those two options.
Because of the low inventory levels, buyers are ending up in multiple offer situations all the time but that does not necessarily mean your home is worth more money.
This market increase is very different in several ways.
During the current phase of home price increases, the market is very different from the market prior to 2006 and the price increases are healthy market driven increases, rather than being falsely inflated.
Want to learn a little bit more about me and my business? How do I help buyers, sellers, first time home buyers, seniors? Take a look at my short video to find out more! Feel free to share the video if you know someone that is looking for a Realtor!