Getting Your Price and Terms in a Hot Market

It's a "super seller's market" right now. Home values are increasing as buyers are competing for homes. According to the National Association of Realtors (NAR), the inventory of homes is at it's lowest since 1999. The NAR cites that in December of 2020 the inventory was down 23% compared to December of 2019. There is so much pent-up buyer demand that homebuyers are in bidding wars and are offering considerably more than list price for homes. If you are a seller, it's the best time to get a good price and the best terms for your home.

Top Dollar

Buyers are paying top dollar for homes right now; great if your buyers are paying cash. However, if your buyers are planning on a mortgage, there is still the issue of the house appraising high enough to justify the sales price.  Some sellers are asking their buyers to waive the appraisal and going as far as asking their buyers to show proof of funds. This to prove they can pay the difference if the house doesn't appraise for the purchase price.

Your Closing Date

You can also negotiate your preferred closing date. Choose a date that is most convenient for you and stick with it. Your buyers will make it work even if they have to close earlier than they wanted to -- or put their belongings in storage and wait for a later closing date.

Financially Strong Buyers

Choose the financially strongest buyers. The optimal choice is to have buyers that are paying cash for your home. If your buyers are obtaining a mortgage, look for buyers that are preapproved for a conventional loan and are putting down at least 20%.

Sell Your Home "As Is"

As a seller in today's market, you can try to negotiate that the buyers purchase your home "as is." When buyers purchase a home "as is" they can still have inspections performed. If the inspections expose too many material defects or safety hazards in your home, they can usually extricate themselves from the contract within the first five business days. To protect yourself further, try to negotiate that your buyers waive all inspections. This means that they won't have any inspections performed.

"House to Sell" or "House to Close" Contingencies

Now is not the time that you should entertain buyers that have a house to sell or even a house to close. A "house to sell" contingency means that the buyers still need to get their home under contract, get through all the contingencies on their home sale, and close before they can close on your home. A "house to close" contingency means that they have their house under contract but that it still needs to go through all the contingencies and close. This is very risky because if you accept these contingencies, the buyers can get out of your contract at the very last moment if they don't close on their home.

Earnest Money

You can also negotiate that the buyers put down a nice sum of earnest money. According to forbes.com, earnest money is usually 1% to 5% of the purchase price of your home. Earnest money is a deposit, held by a third party, that shows a buyer's intent and good faith to purchase your home. In this market it's not unusual for buyers to be putting down more earnest money than in a balanced or buyer's market.

Sellers are not having problems getting their price and terms when selling their homes these days. Home values are currently rising. Now that springtime is here, more homes are coming on the market for sale. It will take quite some time to balance the market.