The Bidding Wars Are Back!

Anyone who has bought a home (or tried to) in the intown areas of Atlanta this year can attest to the fact that the market has shifted. Though there are definitely still good deals to be had, there are many more people competing for those good deals.

Almost every real estate transaction I’ve done this year has involved multiple offers on the same property. This used to be standard fare in the intown Atlanta market many years ago, but it’s something we hadn’t seen in several years. As a good example, I listed a home in Virginia Highland a couple of weeks ago and received 11 offers in the first 48 hours. This is not a typical example market-wide, but for a home in the lower end of the price spectrum for a popular neighborhood, it’s not at all unusual.

Some may conclude that the home in the above example was underpriced, but that assumption was not born out. Although the bidding did cause the price to go somewhat above the asking price, if it was truly underpriced, the offers would have come in significantly higher. In this particular case, many of the bids were from builders and renovators who are now willing to take the risk of doing projects on spec again. That is, without a specific buyer already lined up. There is a backlog of such buyers out there with cash in hand, waiting to jump on good opportunities.

All of this doesn’t mean it’s not a good time to buy, but buyers need to be prepared to have competition in finding that good deal. Here are some tips for navigating today’s real estate market:

• Get your financial ducks in a row. These days cash is king, but that’s not a possibility for most folks, so get your mortgage pre-approved before you even start looking at properties. This will work in your favor in a multiple-offer situation.
• Do your homework. Get to know the neighborhoods you’re considering so you’ll know what’s a good deal and what’s not. (Obviously, that’s something with which a Realtor can help you.)
• Act quickly. Timing is everything in today’s market.
• Write a “clean” offer. In other words, if you’re trying to get a good deal on a home, don’t include unnecessary special stipulations or contingencies.
• When a seller is looking at multiple offers, they are going to look at the whole picture, not just the price. What are the financing terms? How quickly will it close? How long is the due diligence period? In the earlier example, the seller didn’t choose the offer with the highest offer price, but the one with the most advantageous terms, though the price was certainly reasonable.
• Get a buyer’s agent! Not only will a Realtor help you write and negotiate the best offer, but an agent that works in the areas you’re considering will likely know about the best deals before the general public hears about them. Real estate reality shows love to refer to these “pocket listings.”

So, what does all of this mean for the state of the real estate market intown? Right now, with the inventory of available homes being comparatively low, it means homes are selling fast, and that is finally starting to push the prices up a bit. The fact that builders and renovators are jumping back in to the market is also a good sign. Among other things, it means that now is a great time to buy or sell.