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How to handle a bidding war in a hot housing market

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A newly built single family home is displayed as sold in Encinitas, California, the United States, July 31, 2019. REUTERS / Mike Blake

NEW YORK, Jun 17 (Reuters) – When you’ve tried to buy a home in the United States over the past several years, you have typically faced another closed sale bidder.

Last fall, that average rose to two other bidders, according to the National Association of Realtors.

Last winter that number had risen to three.

In April? Try four.

Welcome to the era of real estate competition.

You don’t have to tell John Colantoni. The Jersey City, New Jersey firm partner was recently looking for a property in Pinehurst, North Carolina, the frequent venue for the US Open Golf Championship.

Unfortunately, many other people too – which is why he and his investment partners have been outbid three times, usually by around $ 50,000. When they finally found an attractive four-bedroom room for $ 300,000, they had had enough of losing – and had to be $ 40,000 above the asking price to win the bid.

“It’s a gold rush,” says Colantoni.

Bidding wars are the natural result of a glowing housing market. With economic growth and wages recovering well from our pandemic year, COVID-19 pushing many families to more spacious homes in the suburbs, huge investors entering residential real estate, and interest rates still relatively low, housing has proven to be a very attractive asset class.

In fact, the S&P CoreLogic Case-Shiller Index saw national home prices rise 13.2% annually in March, from 12% the previous month. This is the 10th straight month of accelerated earnings and the fastest increase since December 2005.

“The proportion of houses that are being sold above their list price, which usually indicates a bidding war, is more than twice as high as a year earlier,” says Dan Handy, economic data analyst with the popular real estate portal Zillow.

Increasing your bid game may require more care in developing your local market. know how long homes will stay in the market and what they tend to be aiming for; and choosing the right terms to encourage salespeople to prefer your offer to others.

It may also require flexibility to adjust your bid or revise your expectations as needed. And as with any negotiation, you may need to walk away.

Here are a few tips from the experts:

Don’t fall in love

If houses get five bidders apiece, the chances are they will be outbid, maybe multiple times. But you can’t lose focus.

“Don’t get emotionally tied to a home and imagine your life there,” said Ryan Serhant, head of Serhant brokerage firm, star of Bravo’s Million Dollar Listing New York and author of Big Money Energy. “It’s hard, but if you don’t get a specific home, try not to be devastated.”

RUN THE NUMBERS

The obvious temptation in any bidding war is to offer the moon. But if it locks you in long-term debt that you cannot really afford, then that is not the solution. Instead, rethink your budget expectations: “Look for homes with list prices that are below your maximum budget to give you some room to bid above the list,” advises Zillow’s Handy.

BE REALISTIC

In a more typical housing market, there are a number of conditions that you can haggle on with the seller – from the time of the close date to contingencies to repairs needed.

But in the current market, sellers hold most of the leverage. This is the situation Colantoni faced when the sellers wanted to rent their apartment back for a while until their new home was ready.

“Anything we pushed back, they had all the power,” he says.

HAVE AN AGENT IN YOUR CORNER

In this hyper-competitive environment in particular, it helps to tap into an agent’s resources. They have relationships with other realtors, knowledge of properties that may not be officially on the market yet, and can guide you at the price that the property actually brings you.

Serhant says, “Work with a strong agent and don’t go into battle alone naked.”

The good news is that buyers can still stay ahead in the long run. Like Colantoni, who wants to earn a decent amount of golf fans for years to come with his new Pinehurst purchase.

“Within the first few days, we were firmly booked for two months,” says Colantoni. “I don’t think I’ll ever sell this house.”

Editing by Lauren Young and Lisa Shumaker Follow us at @ReutersMoney or at http://www.reuters.com/finance/personal-finance.

Our Standards: The Thomson Reuters Trust Principles.

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Uncovering Milwaukee’s Real Estate Boom

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You don’t have to be a real estate guru to know that Milwaukee is in the middle of a sellers’ market unlike any we have seen in decades. High demand, low supply, affordable mortgage rates, and opportunities to work from home have created an incredible housing market. What does this surge mean for Milwaukee and how long will it last? I asked Peter Promersberger of The Promersberger Group, Keller Williams, for his thoughts.

As a local real estate agent for 18 years, Promersberger states that the housing market is bursting across the country and Milwaukee is no exception. “The market in this city is just as strong as any other in the country,” he says. “Interest rates remain low and there are many more buyers than in previous years, which makes our market as competitive as that of neighboring cities.”

The Milwaukee Market

According to the Redfin Group, the average home sales in Milwaukee is $ 181,000; an increase of 7.3% from 2020. Recent trends in the Milwaukee housing market show homes sell 3% to 9% above asking price and are typically on the market between 31 and 43 days.

What are buyers looking for? Reports indicate that a quarter of Milwaukee properties recently sold included a home office, finished basement, and / or large master bedroom. Buyers also found great value in homes that included a washer and dryer, fenced yard, and / or patio.

“It’s important to note that the market has changed recently,” adds Promersberger. “Some properties still sell quickly after multiple offers. However, depending on the area and the condition of the house, some start to sit in the market a little longer.

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“In the spring, for example, offers were accepted in which no apartment viewing and no appraisal were agreed. Buyers regularly offered to pay the seller’s moving costs, ”says Promersberger. “While this is still happening, these situations in Milwaukee are starting to decrease.”

What about all condos?

Long-time residents are not only noticing an increase in condominiums across the city, but are also wondering who is moving into these hotspots?

The answer could be found in Milwaukee’s millennial population. In search of pedestrian-friendly neighborhoods, public transport and a variety of entertainment options, young shoppers often find what they are looking for in downtown complexes.

“The local market is strong with condominiums,” says Promersberger. “Young buyers attract condominiums because they want to live in an exciting atmosphere. Many aren’t interested in gardening, and they like the idea of ​​exploring their neighborhood on foot.

“The same goes for empty nests,” he adds. “They’re big on downtown condos because they want to walk to restaurants and other venues. They are no longer interested in maintaining their house and yard. They want a simpler life and that is what condominiums in the city center offer. ”

Some experts assume that the current housing market will shift in 2022 or early 2023. “Personally, I think the market will flatten out in 2022,” says Promersberger. “No matter what, the Milwaukee housing market will continue to be a success. This market has always been and will continue to be exciting and growing, which is just one of the reasons why Milwaukee is such a great city to invest and such a great place to live. ”

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The secret to getting the home you want

Have you found your dream home? In this competitive market, you need to act quickly. Real estate agent Peter Promersberger says working with the agent is key to getting your offer noticed.

“It is important to maintain good communication with the listing agent,” says Promersberger. “As soon as you want to make an offer, have your agent contact the listing agent. Find out what the sellers are looking for in a quote and work with your agent to come up with a fully executed quote. Make sure your agent clearly communicates the terms. By working closely with the agent, you will be better able to create an offer that will grab the seller’s attention. ”

Whether you’re looking to sell or buy a home, contact Peter Promersberger of The Promersberger Group, Keller Williams. Call 262-844-0237 or email peter@peterpsells.com.

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Home Appraisal Discrimination Puts a Dent in Black Wealth | Black Voices | Chicago News

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Research shows that black homeowners run the risk of losing the value of their homes because of discrimination in Chicago appraisals.

A 2015 study found that homes in predominantly white neighborhoods were rated more than three times higher than black and Latino neighborhoods, even after taking into account amenities and household income.

Across the country, black homeowners report that their homes are not rated higher until owners have removed all evidence of being black – family photos, for example.

Now there is growing pressure to pass state laws to protect black homeowners from valuation discrimination. US MP Bobby Rush (IL-1st) supports a bill to set up a task force to solve this problem, the Real Estate Valuation Fairness and Improvement Act (HB2533). Rep Rush also sent a letter to the Government Accountability Office requesting a study on racial bias in home evaluations this year.

Rush says he himself was a victim of valuation bias earlier this year when a white appraiser submitted a valuation of his Bronzeville home that was more than $ 250,000 less than Rush expected.

Lutalo McGee chairs the Discrimination Task Force at Illinois Realtors. He says the task force’s first goal is to make more realtors and homeowners aware of the problem.

“As realtors, we really just need to be familiar with the review process, how to work with reviewers, how we advise our clients on cases where we feel reviews have been unfair, and … prices when they come up,” said McGee . “We are here to educate and empower our customers. Both buyers and sellers. “

And the organization hopes HB2533 continues the work of eliminating inequalities in property valuation and increasing the number of black appraisers.

“Our second mission… is to ensure that our brokers and our members understand how the valuation process should work and are able to manage this process successfully. And ultimately, we hope to influence changes to the regulatory framework and guidelines that govern assessments and how assessments are conducted to ensure that things are unbiased and fair for all parties. “

Junia Howell, visiting professor of sociology at the University of Illinois Chicago, says the big differences arose over more than a century and are part of the legacy of decades of housing policy discrimination.

Howell’s work examines the legacy of redlining in national and local trends.

“What we colloquially refer to as redlining – or the process of literally going through government, going through neighborhoods and rating them and giving higher scores to the whites and the wealthier – is still because of the way we use sales comparisons We have approaches today based on these historical sales as well as various levels of bias built into the systemic element and the decisions of individual appraisers, ”Howell said.

Howell says the practice is nothing new and the effects linger.

“These effects are racial inequality, health effects, environmental effects. They’re ubiquitous because the way we value property affects how taxes and schools work, and affects all of these different components, ”Howell said. “And I would like to emphasize that although all individual prejudices are definitely part of the story and we urgently need more diversity in this area, we also have to be ready to think seriously about how the larger structure in the system is built … because this” Even deeper problems are somehow eliminated with this racial inequality and this perpetuation of inequality that we have continued for almost the last century. “

Real estate appraisal trainee Marcus Knight is relatively new to the industry – he only started work eight months ago. As a black man, he is a rarity in his job – according to the Appraisal Institute, less than 2% of reviewers nationwide are black. The former non-profit director says he was motivated to become a valuer when he realized the power real estate valuation can wield in underserved communities. Knight calls the evaluation process a mixture of art and science.

From Knight’s point of view, the reviewer’s race is less critical than a deep understanding of the neighborhoods he is reviewing.

“You need local market experts, and the most important thing is that you don’t have a lot of black and brown appraisers,” Knight said. “So, you know, if you could bring in more blacks and browns who know these areas … [comparables] for object properties that lead to … a fairer evaluation of the properties. “

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Jim Valentine: Real Estate’s confused sea

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Jim Valentine on real estate

Saturday, October 16, 2021

Real estate markets are very similar to an ocean in that they are made up of an infinite number of variables that create many different “moods”. We had a very strong “current” real estate market for most of the year. This situation is easy to spot and many have participated in it to keep it going. While there is still strong “flow” in the market, other factors are starting to stir it up a little.
On the ocean there is a situation known as the “confused sea”, which is defined as a severely disturbed water surface without a single, well-defined direction of wave motion. In such situations the waves go in all directions and create confusion. There are times in the real estate industry when we have such tangled maritime circumstances and it seems like we are about to step into such a time. What could be causing such confusion in such a strong market, one might ask?
The change in the population is interesting. We are seeing an increase in listings in several market segments. One can only wonder why they waited, but it is very likely that these new sellers will see the market weaken and want to intervene before it’s too late. The market may no longer be what it was, but it is still very strong. Buyers may be able to find a home now, but there are other factors that are causing the swirling waves.
Interest rates are rising, which affects the purchasing power of buyers who are restricted in their borrowing. They are still very, very low, but if they increase it can affect the market. There was a time when the interest rates were 18% and 9 points (1 percent of the loan) and we agents said if they ever get back to 12% we could make a living. Buying money from 2.5% to 3.5% is more psychological than financial, but it can have an impact. Other factors at play may cause it to climb a little higher, but it’s still much lower than the dynamic market from 2005 when we had 5 and 6% money.
Inflation has worked its way back into our vocabulary and can cause most of the disruption. The cost of living has skyrocketed ie gasoline, fuel oil / gas, groceries, electronics, cars, appliances, etc. The real impact on daily life is only just beginning to be recognized by the masses, with many public statements reflecting the possibility of this being long term and get worse. Higher cost of living affects creditworthiness.
It is still a good time to buy so that you can own your home and not have to be subject to rent increases or vacate the property because the owner wants to take advantage of this still great market. You can secure a very good interest rate and have stability in your payment. Sellers are more cooperative and therefore allow more conventional approaches to your purchase than the frenzy we had earlier this year which caused many to compromise their emotional and financial comfort to shop in a competitive marketplace. There is still competition, but not as insane. Northern Nevada’s economy remains strong, which is a good thing.
Confused seas have a greater impact on smaller ships. As a tenant, you will feel the confusion in the real estate market more than as an owner. Don’t overwhelm yourself, invest wisely and enjoy the American Dream while everything else is fine. We know from our 40+ years of property sales in Northern Nevada that the market will be cyclical. It always does. Slat the hatches, secure the loose items, and drive off. It makes the ultimate smooth sailing that you are about to experience that much sweeter. Get a plan to sell or buy your home with your realtor and work your plan out.
If you are clear about your wants and needs, you can achieve them in this market. Your clarity will help clear the confusion around you. Work your plan and enjoy the results. Those are the good old days!
When it comes to selecting professionals to assist you with your real estate needs … experience is priceless! Jim Valentine, RE / MAX Realty Partner, 775-781-3704. dpwtigers@hotmail.com

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