Thinking of buying a house?  Welcome to the shark tank!  By now I’m sure you’ve heard stories of homes getting multiple offers.  Five, ten, or fifteen offers on a single home are not unusual.  First let’s understand why this is happening.  Then let’s consider important lessons for both buyers and sellers.

What’s Fueling the Fire

It’s not complicated.  Low inventory and high demand are creating the perfect storm of competition.  Compared to ten years ago, the available homes for sale in Whitefish Bay is down 16%.  The complications of covid and the ability to work virtually from anywhere has people staying put.  Drive around the Bay and you’ll see construction projects in every neighborhood.  Rather than moving, many are choosing to simply add on.

At the same time historically low interest rates, a strong stock market for most of 2021, and high incomes have created a groundswell of buyers. 

Lessons for Buyers

While purchasing a home in this market is challenging.  It’s not impossible if you adopt the following strategies:

  • Expand Your Parameters – the availability of homes is limited; therefore, you’ll have more options by streamlining requirements.  Consider adjacent communities like Fox Point and Shorewood.
  •  Act Quickly – homes are selling fast.  You must get there on either the first or second day of showings.  It’s critical to be decisive.  You have only a few hours to decide if you’re willing to spend many hundreds of thousands of dollars. It’s unfair – most people need more time to pick out a $100 toaster!
  • Don’t Hold Back – present your best offer up front.  The old days of back-and-forth negotiations with the seller are over.  Sellers are simply accepting the best of many offers.  It’s important to understand all the “levers” that you can and push and pull to entice a seller.  Price is the obvious one.  But there are many other terms and contingencies to consider.
  • Adjust Your Mindset – be prepared, the heat of competition is going to push you outside of your comfort zone.  You’re to spend more than you want and drop many of the usual contingencies.  And after writing an incredibly strong offer, recognize that the probably of winning might be less than 25%.  It’s important to not get emotionally attached and just move on to the next home.

Lessons for Sellers

The market is clearly tipped in favor of sellers.  But it doesn’t mean that they can be complacent.  It’s sellers that do the right things that are handsomely rewarded.  Want to maximize the selling price of your home?  Here’s what you must do:

  • Prepare the Right Way – make your home highly appealing to buyers.  Streamline possessions, freshen up paint, replace dated light fixtures.
  • Price Correctly – don’t overreach on price.  Yes, it’s true that many homes are selling above the asking price.  That only happens when the home is introduced at the correct price.  Price right and trust the market to lift the price to its maximum potential.
  • Look Beyond Price – price is just one of the important terms in the offer.  Don’t forget about the other terms.  What’s more important to you?  An offer without an inspection contingency?  A cash offer? How important is the closing date?  Several tradeoffs must be weighed when evaluating offers.  Your Realtor will help you consider the impact of each item.

It’s an exciting and energetic time in the Whitefish Bay real estate market.  Wishing you the best of luck and you navigate through it!