February was a hectic month! There was a period when I had two closings, three new escrows, I drove 100 miles in one day to show properties to four different clients, and I submitted six offers for four different buyers. Overlapping from late January, I worked over 30 days straight.
Buying and selling real estate can be an emotional roller coaster, especially when our housing inventory is low and when owners receive upwards of 30 offers. Let us think about this for a second. If a seller receives 30 offers, you have a 3.3% chance of your offer getting accepted. How can you improve your odds?
Depending on what type of home you are looking for, you should consider to submit an above asking price offer with contingencies heavily favoring the seller. This can include reducing your due diligence time and or waiving certain contingencies. More so, you might even have to overpay just so your offer stands out from the crowd. Also, you should submit your best and final offer because you might not get a second bite at the apple. I often say, "Put your best foot forward." As a Realtor who has helped countless buyers, it grinds my gears to know my clients have little leverage in these situations. However, I would not be doing my job if I did not properly advise them.
What is interesting is some sellers are not making practical and wise decisions. In one situation, I was told my clients' offer was the highest. However, the seller decided to accept another offer because that buyer said they could close in less than 45 days with a conventional loan. My clients had a conventional loan too. For those of you do not know, conventional loans take 45 days and some lenders can close them in sooner than later. With that being said, if our offer was the highest, why not just wait a few more days to close? Although price is the driving force for your offer, this clearly shows that the highest price offer might not be the winning bid.
What is the solution to all of this? It boils down to being aware of our housing market. If you understand what is occurring, you will be able to take advantage of the situation. For sellers, pricing your home aggressively appropriately is important. Just because you see some real estate stat that says the market is popping off, that does not mean your home will sell. The details are so important because condos are different than single-family properties. High rises are different then town homes. Non CPR single-family versus single-family, etc.
For buyers, if you are in denial, you might be sitting on the sideline for awhile. Make sure your financing is down pat and submit an appealing offer. You want your offer to standout since sellers can have 30+ offers to choose from.
JUST SOLD
Greg, Robin, and I recently closed on a split-level, 2-bed/2-bath/2-parking townhome at Windward Estates. Our sellers listed the property in 2020, but we withdrew it due to COVID-19. Since the sellers were still living in the home, they did not want prospective buyers walking through their house. At the time, there was not much information about COVID-19. We fully supported our sellers' decision to withdraw their listing because their health and safety were our main concerns.
Studying the comps, our sellers decided to strategically price their unit below the sold comps. The other option was to remodel the unit and price it aggressively. We opted to not do the remodel since we felt it would be better for the next buyer to add whatever tasteful upgrades he/she desired.
Pricing the unit slightly below the sold comps turned out well since we hand numerous showings and multiple offers. The icing on the cake was the buyer's lender was able to close the deal in 35 days. This turned out in our favor since our sellers preferred a quick close.
I must commend our sellers for being practical in their approach. First, they have been studying the market, especially the Windward Estates market. Second, they saw the big picture. Rather than squeezing every dollar out from the sale, they knew their time was better spent closing the transaction so they can look for their forever home.
RAMBLINGS
Estate Planning
Can you tax your way out of an economic crisis? There is a new bill at the Hawaii State Legislature looking to tax inheritance at the state level at over $1 million.
Proponents argue the state needs more progressive taxes -- "taxing the rich." Also, since our local economy is recovering, some people argue the tax dollars are much needed.
Opponents say this will affect countless working class local families, especially those who inherent real estate. With Hawaii's high cost of living, more taxes could put people at a disadvantage.
ALOHA Homes Program
We need more affordable housing. However, what is the best way to create this? State Senator, Stanley Chang, is a supporting of mimicking Singapore's public housing model. During the current legislative session, Chang introduced ALOHA Homes Program. "ALOHA" stands for "Affordable, locally owned homes for all." Chang's plan is to build public housing homes on state owned land to local people .
-Roda