Consider a Fixer-Upper to Avoid Competition and High Prices, Redfin Agents Advise
SEATTLE - Jul. 6, 2016 - The greatest challenge for homebuyers in the second quarter of 2016 was bidding wars, according to Redfin (www.redfin.com), the next-generation real estate brokerage. In a survey of nearly 800 Redfin real estate agents across the country conducted in June, 51 percent responded that multiple offers were the greatest challenge buyers faced in the second quarter, up from 40 percent just three months ago.
This represents a shift from the previous two quarters, when Redfin agents reported that low inventory was buyers' primary challenge.
This season's competitive market dynamic has given rise to an increasing challenge for buyers and sellers alike-buyers strategically making offers on more than one house at a time to increase the probability of getting an offer accepted.
While this strategy can be tempting for buyers who are frustrated from having lost out in a bidding war, Redfin agents advise against it in most cases.
"I recommend that clients in this situation take a step back and consider what's most important to them in their next home and how far they're willing to go to get it," said Redfin agent James Gulden in Boston. "That way, they can be in the right mindset to make an offer they feel good about on a home they truly love when it hits the market."
Likewise, home sellers need to beware that the highest offer is not necessarily the best offer. Their agent should help them vet the offer closely and consider many factors other than price, including how committed the buyer is to this particular home and how willing and able they are to close.
When asked why purchase contracts fell through this spring, 39 percent of agents responded that negative or surprising inspection results were the cause and 25 percent said the buyers simply changed their mind about purchasing the home.
In fact, the root cause of failed transactions is a combination of the two.
"It's not necessarily true that the inspection reveals major issues or that the buyers just got cold feet," said Redfin agent Jeremy Paul in San Diego. "It's more that the buyers who are making multiple offers at prices they may not be able to afford just to get an offer accepted often use the inspection as a chance to negotiate significant credits in order to reduce costs. When the seller won't budge, the buyers move on."
Redfin asked its agents about the greatest compromises buyers made this spring during the homebuying process. Paying more for a home than the buyer originally planned topped the list, with buying a fixer-upper coming in a distant fourth place. When asked what most frequently turned buyers off during home tours this spring, one in four agents named outdated kitchens and bathrooms. In some cases, Redfin agents advise against dismissing those homes too quickly.
"I've been advising a lot of my buyers to consider homes that may need a little TLC in desirable neighborhoods within the inner core of the city," Austin-based Redfin agent Andrew Vallejo said. "Competition is high in the hot neighborhoods, but if buyers are willing to reconsider their priorities it's possible to find a great home without the worry of a bidding war and without breaking the bank."
About the Survey
Redfin's survey was conducted between Jun. 16 and Jun. 19, and includes responses from 785 real estate agents in 38 states and Washington, D.C.
To read the full report, please visit: https://www.redfin.com/blog/2016/07/q2-2016-redfin-agent-survey.html
Redfin (www.redfin.com) is the next-generation real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the customer's favor. Founded by software engineers, Redfin has the country's #1 brokerage website and offers a host of online tools to consumers, including the industry's most accurate home-value estimate, theRedfin Estimate. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commission. Redfin serves more than 80 major metro areas across the U.S. The company has closed more than $31 billion in home sales, and saved customers more than $335 million in fees, and counting.