Sellers Market ? (by Roy [AL]) Oct 16, 2020 7:28 AM|
Sellers Market ? (by S i d [MO]) Oct 16, 2020 8:34 AM
Sellers Market ? (by Ken [NY]) Oct 16, 2020 8:36 AM
Sellers Market ? (by plenty [MO]) Oct 16, 2020 8:41 AM
Sellers Market ? (by David [MI]) Oct 16, 2020 8:49 AM
Sellers Market ? (by plenty [MO]) Oct 16, 2020 8:51 AM
Sellers Market ? (by Roy [AL]) Oct 16, 2020 9:22 AM
Sellers Market ? (by David [MI]) Oct 16, 2020 9:27 AM
Sellers Market ? (by Roy [AL]) Oct 16, 2020 9:46 AM
Sellers Market ? (by RB [MI]) Oct 16, 2020 9:56 AM
Sellers Market ? (by Tonia [RI]) Oct 16, 2020 10:13 AM
Sellers Market ? (by Roy [AL]) Oct 16, 2020 10:36 AM
Sellers Market ? (by Oregon Woodsmoke [ID]) Oct 16, 2020 10:41 AM
Sellers Market ? (by Allym [NJ]) Oct 16, 2020 10:44 AM
Sellers Market ? (by David [MI]) Oct 16, 2020 10:44 AM
Sellers Market ? (by S i d [MO]) Oct 16, 2020 11:04 AM
Sellers Market ? (by 6x6 [TN]) Oct 16, 2020 11:07 AM
Sellers Market ? (by Nicole [PA]) Oct 16, 2020 11:24 AM
Sellers Market ? (by Robert J [CA]) Oct 16, 2020 11:28 AM
Sellers Market ? (by Frank [NJ]) Oct 16, 2020 12:01 PM
Sellers Market ? (by Roy [AL]) Oct 16, 2020 12:19 PM
Sellers Market ? (by Landlord ofthe Flies [TX]) Oct 16, 2020 2:05 PM
Sellers Market ? (by S i d [MO]) Oct 16, 2020 3:11 PM
Sellers Market ? (by Nicole [PA]) Oct 16, 2020 3:30 PM
Sellers Market ? (by Tonia [RI]) Oct 16, 2020 3:38 PM
Sellers Market ? (by Ray-N-Pa [PA]) Oct 16, 2020 8:41 PM
Sellers Market ? (by BRAD 20,000 [IN]) Oct 17, 2020 1:41 AM
Sellers Market ? (by Roy [AL]) Oct 17, 2020 6:34 AM
Sellers Market ? (by Cjo’h [CT]) Oct 19, 2020 3:31 PM
Sellers Market ? (by Cjo’h [CT]) Oct 19, 2020 3:36 PM
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Sellers Market ? (by Roy [AL]) Posted on: Oct 16, 2020 7:28 AM
What is your definition of a 'sellers market' in the RE world? Does this type of market exist only in Class A and B neighborhoods?
I have a newly rehabbed 3/2 house right now which needs to be either rented out or put up for sale. It is was rehabbed to Class B standards but it is still located in a Class C hood though.
To me, a true sellers market would be where houses sell quickly (less than 60 days) and at near their asking prices. If you have sold a Class C house lately, I want to hear from you.
Sellers Market ? (by S i d [MO]) Posted on: Oct 16, 2020 8:34 AM
Sellers market is roughly whenever demand to buy exceeds supply, as defined by the absorption rate. This is defined as the number of weeks it would take to clear all of the inventory currently for sale.
In my town, the average absorption rate is 6-8 weeks. If the # of weeks goes lower, it's a Seller's market. Houses are selling quickly and you better get your bid in fast, close to or above asking, and don't ask for Seller paid closing costs. The opposite is true: if the rate goes out to 10+ weeks, there is a glut of inventory and Buyer's can pick and choose. Sellers offer incentives like carpet allowance or up to $XXXX prepaids/closing costs.
When I see Buyers paying over asking price and offers are high cash/all cash, that's a Seller's market. As Real Estate Investors, we can win in both markets. We buy when the market is down, hold onto it, and wait until it's high and then sell. --107.216.xxx.xxx
Sellers Market ? (by Ken [NY]) Posted on: Oct 16, 2020 8:36 AM
Sellers market means houses are selling fast,put a listing on the MLS and lots of buyers are looking at it within a day or two and multiple offers and selling for above asking is common.In a class c neighborhood the buyers come from out of the area and buy with cash for investment purposes,in my case they come from NYC and sometimes dont even come see it.Class C houses are affected by a sellers market in that they sell more similar to a class a or b during a sellers market in that they get sold by just putting them on the MLS,you dont need an owner or agent who knows how to sell a low end house by marketing it properly.Sellers market also means i am getting considerably less calls on my advertising to buy houses,i am not needed in the market because everybody wants to flip a house right now.I think the market is starting to slow down in the last couple weeks
Sellers Market ? (by plenty [MO]) Posted on: Oct 16, 2020 8:41 AM
The class C+ house we have on the market now is getting passed over. The feedback indicates investor offers 30k under asking or retail buyers who state the obvious that we cant change, rock road leading to house, neighbors yards look not caried for, there was one more(?) Anyways the house otherwise has alot to like and everything else is out of their price range. So we wait with the agent for the right buyer. If we spend $20k in rehab we could get $20k more and have it sold and we might just have to do that. Or re move listing and rent it. Seems we are stuck in the middle in this market. --99.203.xxx.xxx
Sellers Market ? (by David [MI]) Posted on: Oct 16, 2020 8:49 AM
You can use whatever label you want to describe the market. It doesn't change the fact that it is simply a matter of prices dynamically adjusting to changing supply and demand.
Here and I imagine in most northern climates, demand drops off a cliff in winter. Many times a seller put their house on the market in summer and priced it too high. It sits thru out the summer and by the time winter rolls around , they can no long even get the regular summer price. I have bought many of my properties with this "winter discount" --50.4.xxx.x
Sellers Market ? (by plenty [MO]) Posted on: Oct 16, 2020 8:51 AM
Correction. If we did $20k in improvements we could list for $10k more. We'd be out time and materials and $10k. So we wait to see if that is necessary. --99.203.xxx.xxx
Sellers Market ? (by Roy [AL]) Posted on: Oct 16, 2020 9:22 AM
Last June, after hearing rumors of a 'hot sellers market' in my town, I put one of my Class C rental houses up for sale and did not get one offer. After 60 days of being on the MLS and no offers, I fired my agent. 3 days later, I rented the house at market rent.
Now, I have another house to either rent or sell and I still hearing those same rumors, (coming from local RE agents who want me to list with them). What do I now? If I can get my asking price and a cash buyer within 60 days, I would be inclined to sell. However, if all of the potential buyers are just looky-loos who are only capable of making low-ball offers, I do not have patience for that. --68.63.xxx.xxx
Sellers Market ? (by David [MI]) Posted on: Oct 16, 2020 9:27 AM
ask for MLS comps of recent sales to see how long it took to sell and what sale price was --50.4.xxx.x
Sellers Market ? (by Roy [AL]) Posted on: Oct 16, 2020 9:46 AM
I did that last summer. My asking price was based on what other similar houses (comps) in this hood where selling for.
I am still of the opinion that a 'hot sellers market' only applies to Class A and B hoods where most buyers can obtain mortgages at record low interest rates. However, those low interest rates are only available to people who have great credit and the required cash down payment. Many Class C house buyers are not in that same category which explains why many Class C buyers can only pay cash for a house. --68.63.xxx.xxx
Sellers Market ? (by RB [MI]) Posted on: Oct 16, 2020 9:56 AM
Most recent example. (Sept.2020)
3/1, 120 year old, 2 story.
No driveway or garage.
28' x 75' postage stamp, city lot.
Polished that Pig for rental market.
12- year run.
Self managed and maintained.
City issued 6-year code compliance.
Collected (well over) one hundred thousand in rents.
Paid $18.500, Cash. (08')
Had 20+ come look at it.Owner to look at offers in 5 days.
3- written offers.
Went with a cash offer of $115.000 (Was NOT the highest)
No strings attached to offer.
Closed 10- days later.
All part of MY exit plan.
One less Tenant,Toilet and Tax.
Sellers Market ? (by Tonia [RI]) Posted on: Oct 16, 2020 10:13 AM
I am trying to sell in my class C neighborhood in Providence. I am having second thoughts. I am firm that if I don't get my asking price (or above) and no, I am not offering to pay closing closts...it is not going thru. The agent is already asking if I can get a unit vacant, when I told her it would be sold with all the existing tenants in place. All my tenants are great, pay on time (or as agreed) and keep (relatively) decent the apartments. There is always a demand for renters, and my rent rates are slightly lower then market. I am truly having second thoughts. Why? I love being a landlord. I love helping people with a good home in my apartments, and I actually care about my residents as I hand select each one. The listing agreement is thru early January with my agent...I guess I have to allow marketing now since I signed the agreement? I am very sad about this as I already have interested parties with a "coming soon" listing. Can I get out of this somehow if I change my mind? The agent has been a help to me in the past so I want to try and work with her but I am having remorse. --70.168.x.xxx
Sellers Market ? (by Roy [AL]) Posted on: Oct 16, 2020 10:36 AM
With any agent that I list with, I tell them I will give you 60 days max to sell this house on the MLS. After that and with no pending offers, I will rent the house out. IMO, all unsold MLS listings become 'stale' after 60 days,..especially in a hot sellers market.
If I had to describe my market here, it would a hot Landlord's market, which has been the case for years. --68.63.xxx.xxx
Sellers Market ? (by Oregon Woodsmoke [ID]) Posted on: Oct 16, 2020 10:41 AM
Does anyone except for investors ever buy in Class C neighborhoods? Investors will never pay full price.
One of the presidential candidates ran a TV ad here promising $15,000 to everyone for down payment on a house. So if he gets into office, I suspect that there will be plenty of Class C people wanting to purchase their very own house. --76.178.xx.xx
Sellers Market ? (by Allym [NJ]) Posted on: Oct 16, 2020 10:44 AM
A crappy house that sits almost out in a four lane road got sold in a month next street over. There are contractors looking for homes to rehab and flip since people are not working, or just don't want anyone coming to their home. Not sure where the money is coming from. I know about the grant program that has been available for about 5 years or so. Maybe contractors are driving this trying to keep their people working. There were those govt. business loans given out if you keep your people and don't fire them. That may be the source of the money.
And then people want to get out of the big D cities because there is chaos. --71.104.xx.xxx
Sellers Market ? (by David [MI]) Posted on: Oct 16, 2020 10:44 AM
They will still need to pass bank underwriting!
fha/pmi only needs 3% so it's not like they can't buy a house already if they had the credit --50.4.xxx.x
Sellers Market ? (by S i d [MO]) Posted on: Oct 16, 2020 11:04 AM
Class C and lower are a different story, as they are usually:
1) Cheaper. Many banks won't mess with properties under $50,000...too small of a spread.
2) Don't meet guidelines for FHA/VA, the average first time borrower's loan product of choice.
3) Often are only attracting investors. I disagree though that "investors don't pay full price." Sale price IS full market price, by definition, unless you are selling under pressure. See the standard def of market price. It just so happens that cheaper houses sell for cheaper prices. That is built into the market already. That's why I say the only time I have successfully bought "at a discount" is when there were few/no other bidders. Exposure = more buyers = better price.
To get a higher price, you can try selling on owner finance like or using the RTO option. That scenario comes with its own risks and the reward is built into the price/terms.
Let's say you believe an investor might pay you $50,000 for your house "as is", but you haven't gotten any offers. Have you offered your property for sale like this?
"For Sale Owner Finance. $2,000 down; payments of $600 for 120 months. Start your journey of being a homeowner today!"
$2,000 down + ($600 x 120 payments) = $74,000.
I go back to my mentor Dave Ramsey for this lesson, although it works backwards in this scenario. Dave teaches that broke people don't ask "How much?" They ask "How much down and how much per month?" You can make that work to your advantage, but keep in mind you're selling to someone who probably has bad credit and a habit of not paying. Be ready & able to evict and/or foreclose, depending on how you structure the deal. --107.216.xxx.xxx
Sellers Market ? (by 6x6 [TN]) Posted on: Oct 16, 2020 11:07 AM
Roy, would that not be overbuilt and then cost you in a sale?
Tonia, read your contract and see what it says about getting out of it. I think most say that you would still have to pay the commission to get out. Why not just ask the agent if she would just let you out of it and see what she says? Read your contract first so that you know the rules ahead of time, but I would ask. She may just let you out of it or for a small fee. If she does then just get the agreement in writing and offer to use her in the future. --73.120.xx.xxx
Sellers Market ? (by Nicole [PA]) Posted on: Oct 16, 2020 11:24 AM
Mine are selling in days. I am class C - both my multi units and single family. I price them fairly.... a good deal for me and a good deal for the buyer (since they're all investors). I do not own properties that "homeowners" want to live in. Local investors are offering me well less than 1/2 my listing price. My investors have been from out of the area/state and see what a great deal they are getting. Mine are all priced a little lower than other similar properties in the area.
Could I hold out and get a little more? Probably but I am a "bird in the hand" kind of person. My goal is to sell so I am selling.
Consequently I also want to be buying since I've got this abundance of cash but prices are too high. Sheriff sale inventory is down to almost nothing (from a few years ago where there were 100+ per sale). --72.70.xxx.xx
Sellers Market ? (by Robert J [CA]) Posted on: Oct 16, 2020 11:28 AM
A "sellers" market. This is when conditions are right that a seller can get the "Top Price" and the buyer can easily find favorable financing. Most deals can close quickly without too much drama. --47.155.xx.xxx
Sellers Market ? (by Frank [NJ]) Posted on: Oct 16, 2020 12:01 PM
Tonia: what you need is an "unconditional withdrawal".
Your exposure for commission is only if someone that the Realtor has shown the property to buys the house within a contractually mandated period of time, then you will owe them a commission. This also goes for any prospects that got a showing from a participating broke/agent.
The state specific answer will lie in your contract with the Agency. Do not let them BS you, or drag it out. Too, if you make this request you may get a coupla BS "deals' dragged in by the agent to forestall the withdrawal. Those deals fall apart a few weeks into the escrow process.
Good luck with all of it --74.105.xxx.xxx
Sellers Market ? (by Roy [AL]) Posted on: Oct 16, 2020 12:19 PM
Thanks Sid for that great explanation of the Class C selling market. You nailed it!
My experience says that people who can qualify for a traditional mortgage and can get those record low interest rates are generally only looking in Class A and B hoods. They may currently rent in a Class C hood but with a 2.5% mortgage, they can now move up to Class B hood.
I have to leave here and put my PM hat on. I will be back later. --68.63.xxx.xxx
Sellers Market ? (by Landlord ofthe Flies [TX]) Posted on: Oct 16, 2020 2:05 PM
Sellers and buyers markets are very localized. Look at your neighborhood or area's stats to see. Specifically look at DOM (days on market), inventory of available houses in the focused area (sometimes it's measured in days), and look at prices. If prices go up, DOM is 30 or less, and there are few houses available to buy then yes, you're in a seller's market and should expect multiple full price offers if it's priced correctly. --108.69.xxx.xxx
Sellers Market ? (by S i d [MO]) Posted on: Oct 16, 2020 3:11 PM
My pleasure, Roy.
Btw, I reverse engineered my example in an amortization calculator and the $600 pmt over 10 years works out to around 7.75% interest rate, which is probably too low given the risk. Hard money lenders in my area want 1% per month simple interest or 12% per annum, so if you were going to get "market" rate then that would make each monthly payment around $720, for a total "Sale price" of around $87,000.
Not unreasonable, actually, given how much interest people normally pay on houses over a 30-year loan. But you have to target your demographic carefully: what person living in a C-hood will pay $720 consistently for 10 years? My guess is you'd be taking that house back after a couple of years and reselling it. That's kind of the RTO model. --107.216.xxx.xxx
Sellers Market ? (by Nicole [PA]) Posted on: Oct 16, 2020 3:30 PM
Tonia - eliminate "I won't pay closing costs" from your equation. Figure out what you want to net. Doesn't matter to you how they creatively get there. --72.70.xxx.xx
Sellers Market ? (by Tonia [RI]) Posted on: Oct 16, 2020 3:38 PM
Thanks TN and Frank for your input...much appreciated. Yes, my agent is agreeing to withdraw the listing at this time. I will consider utilizing her services in the future. Although she tends to sell more high end properties, in much better areas. I do know that as a landlord, I have learned so much from this group and I do have to tighten up my rental criteria. --70.168.x.xxx
Sellers Market ? (by Ray-N-Pa [PA]) Posted on: Oct 16, 2020 8:41 PM
C neighborhoods are working class blue collar workers. These folks do work. I am not sure why you would think these folks can't get a loan from a bank......perhaps not from a mortgage broker as the loans are smaller.
If you are having to pay cash - I am think lower than class C housing. When I hear the term "hood" - that doesn't sound too nice of a place --24.101.xxx.xx
Sellers Market ? (by BRAD 20,000 [IN]) Posted on: Oct 17, 2020 1:41 AM
Rates are so low and mortgage rules have relaxed so they don't bother looking at a class C.
Local banks are advertising 2.5%, 30 yr fixed, so they can get a $200,000 4 bedroom, 2 bath, 2 car garage, curbs and sidewalks house where all the mailboxes match for the same $790 payment per month I charge for a $50,000, 900sf, 1 bath, no garage, gravel driveway rental house
Realtors don't want to mess with low end houses - little to no commission. And they tell me selling a $300K house is EASIER than a $75,000 house.
If homes won't sell, consider upping the value with seller financing or creative terms. MOST low end home buyers cannot qualify for a bank loan.
RTO does GREAT for us. People just keep putting $1000-5000 Non-refundable Option Fee each time it turns.
Sellers Market ? (by Roy [AL]) Posted on: Oct 17, 2020 6:34 AM
You nailed it too. My only point with this post was that a 'hot sellers market' only seems to exist in Class A & B markets where all of the cheap mortgage money is.
In Class C markets, things are different. I have sold houses in Class C hoods, but they were only sold to other investors who had cash.
The reason $300K houses are easier to sell is because the realtors are not having to deal with rookie first time homebuyers who need a realtor to hold their hands. Buyers for $300K houses are more seasoned, mature and are willing to put their money where their mouth is.
Sellers Market ? (by Cjo’h [CT]) Posted on: Oct 19, 2020 3:31 PM
A lot of the Agents are lazy,they’ve had it too easy for too long when they have to start to work for a living,they’ll change their attitude.............charlie --32.214.xxx.xx
Sellers Market ? (by Cjo’h [CT]) Posted on: Oct 19, 2020 3:36 PM
Oh ! and Roy why do you get up so early in the morning,can’t you sleep in like every one else...............................,,,,..charlie --32.214.xxx.xx
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