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What Low Inventory Means

The Difference Between a Buyer's and a Seller's Market

· Real Estate,Fan District,Historic Homes

The real estate market in RVA is strong.

I do most of my listing and selling in the City of Richmond, and mainly on the North side of the River. Right now, across those areas, we have an inventory shortage. If you are trying to either buy or sell a house, what does that mean?

FOR BUYERS:

If you are a prospective buyer:

  • You need to have an "ASAP" search set up in the Central Virginia Regional Multiple Listing Service ("CVRMLS").  The CVRMLS is the proprietary database used by local real estate agents.  With an "ASAP" search from this database, you will get an email the moment a new listing that meets your criteria goes active.  Zillow and Trulia and other consumer-facing sites may not have all of the listings and also tend to have a time lag before new listings show up on their sites.  In a market as overheated as this one, a day or two delay in seeing a listing may mean the house is already under contract.  Don't put yourself at a disadvantage.  If you are seriously looking, or even if you are just checking out the market for a possible future purchase or sale, get an MLS search.  Any agent would be happy to set it up, no cost, no obligation.
  • You and your agent also should be checking Zillow and Trulia for "For Sale By Owner" ("FSBO") listings, or "Make Me Move" listings.  While I will admit, as an agent I dislike dealing with FSBOs, in this rapidly moving market we are seeing more people attempt to sell their homes themselves.  So that potential pool of homes shouldn't be overlooked.
  • You need to be ready to M-O-V-E, when the right property comes along.  This might mean dropping everything to go see a property as soon as it goes active.  That also may mean being prepared to write an offer quickly.  If you take a day or two to think it over, your dream house might be gone.
  • You need to have your ducks in a row.  For example, you need an up-to-date lender letter, or a "proof of funds" if you are offering cash.  You need to be prepared to write a check for your "Earnest Money Deposit," ("EMD").  This is the "keep you honest" money, which you as a buyer would lose if you breach the contract.  You should think about who you want to use as your inspector and your closing agent.
  • Once you are under contract to buy your dream home, you will still have to get through the inspection, the appraisal, and finalize your financing.  Take a deep breath.  Try to relax.  The process can be confusing, frustrating, stress-inducing.  Just try to remember you and the seller are trying to work towards a common goal - getting this house sold! And remember the prize at the end of the race - your new home!
  • Don't hesitate to rely on your real estate agent as a resource.  Ask questions!  We do this all day, every day, and sometimes we forget that what is completely normal and rote to us, may be confusing and opaque to the buyer and seller.

FOR SELLERS:

If you are a prospective seller:

  • You need to find a great listing agent, who specializes in your geographic area and possibly the specific type of property you are selling.  For example, in the City of Richmond we have a lot of condominiums. You probably don't want to list with someone who is not familiar with the special rules and quirks that go with condominiums.
  • You need to follow your agent's advice on preparing your home for market.  This may involve making minor repairs and it should almost always involve staging.  If your agent suggests staging, don't take it personally!  A stager's job is to make the home look beautiful in pictures and appeal to the broadest possible group of people.  That means styling your home in a way that almost no one actually lives.  And that means de-personalizing - from changing out bold colors, to removing art work, to putting away your family photos.  This is no knock on your personal taste or style.  It is a result of consumer expectations, what we agents call the "HGTV effect."  Buyers expect beautifully presented, move-in ready homes.  Spending some money on the front end can pay off with both a faster sale AND a higher sale price.
  • You and your agent should develop a marketing strategy, so you both have clear expectations on how your home will be marketed.  There should always be basic components, like the MLS listing itself and some sort of color brochure for prospective purchasers to take with them.  But what about other marketing tools?  Do you want to have an Open House?  I generally recommend an open house for the first Sunday of the listing, but some people don't like them or want them at all.  What is your social media marketing going to look like?  Do you expect print marketing, like in the newspaper or other periodicals?  Being on the same page on the front end makes the transaction that much smoother.
  • You and your agent should have a clear strategy in the event of multiple offers.  With inventory as low as it is in desirable neighborhoods, multiple offers are common, if not expected!  How do you want to handle them?  Do you pick a date and time for initial offers to be presented?  If there are multiple offers, do you call for "highest and best?"  Or would you prefer to negotiate with just one offeror?  Having a game plan before a multiple offer situation arises can make life a little less stressful.  Selling a house is stressful enough!

This is obviously not the end all, be all advice for buying or selling a home, just some quick tips and strategies for the current market. If you need more insight into the process, I always recommend this overview from the Office of Housing and Urban Development.

As always, thanks for reading my blog. I welcome your thoughts, comments, suggestions. I would LOVE for you to suggest possible topics.

- Melissa

(804) 986-3993

Email: melissa@mikemelissa.com

URL: www.mikemelissa.com

Facebook: www.facebook.com/mikemelissarva

Twitter: @mikemelissarva

Instagram: mikemelissarva

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