By Mike Bodeen · 21 November 2022
In the above “Cromford Index” a reading south of 90 indicates a buyer’s market. If the wise Yoda was asked about the current state of the Phoenix Metro real estate market, what would his response be?
“A Buyer’s Market you are in. A seller’s Market cannot be.”
Last week we began looking at what sellers can do to increase their odds of getting their home sold in what is now “officially” a buyer’s market we find ourselves in. The first (counter-intuitive) suggestion applies best to sellers whose home has been on the market for a while unsold. They could take their home off the market for 45 days or more.
This accomplishes two important objectives. First, having your home off the market (canceling the listing) for 45 days or more, and then bringing it back will restart the DOM (days on market) to zero. This is huge. All buyers look to the DOM when considering looking at and/or offering on a home.
Secondly, taking a home off the market at this time, gives you a much-needed emotional break, especially if you’re living in the home. Relax, enjoy the holidays without interruption, and bring the home back on the market after January 1st – just remember it MUST be at least 45 days – not 44.
You might think our next suggestion would be about price. Well, a seller MUST be realistic in their pricing, otherwise our other suggestions would not avail at all. And of course, a home’s condition is ALWAYS important, though you may not have thought so based on the crazy 2021 sellers-market we’ve just passed through.
In my opinion, the 3 most important words in real estate at this current date in time, are not location, location, location. Don’t get me wrong, location will always be foundationally at the top of the value list. But today, the three most important words for getting a home sold, are terms, terms, terms.
“But today, the three most important words for getting a home sold, are terms, terms, terms.”
A huge number of buyers are locked out of the market because of high mortgage rates. With current mortgage rates hovering around 6.5%, rather than considering another price reduction, what if the seller instead, paid a lender who could provide a current rate of 3.5% for a buyer- for an entire year?
This type of loan program is known as a “3-2-1 Buy-down.” Yes, the rate would move up 1% each year to 4.5% the next year, 5.5% after that and then cap out at 6.5%, but there’s no pre-payment penalty and buyers can refinance at anytime. These are legit Fannie Mae, Freddie Mac loans and even government insured loan (FHA) programs.
This 3.5% rate then needs to be front and center in the seller’s marketing for all the world to see. This may even pull back some buyers who were previously interested.
Worth a shot.
Market data referenced in this article comes from The Cromford Report.