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Truths about the current real estate market—and tips on buying in a seller’s market

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If you’re buying a home right now, you’ve got a lot of company. Maybe you’ve already found yourself in multiple-offer situations. It’s possible you’ve even had trouble booking appointments to see homes you’re interested in because so many other buyers are trying to see them, too. 

We’ve heard agents with decades of experience say they’ve never seen a more competitive market than they’re seeing right now. If that sounds scary, we understand. A market like this creates frustration for buyers. It can even break hearts. We’re here to help!

There’s no single solution to less-stress homebuying in an ultra-busy market, but there are options. We talked to Flyhomes agents in extra-hot markets—the Bay Area, Southern California, and Seattle—for insight on exactly what’s happening in the market and how to navigate through heavy competition. 

Just how crowded is the real estate market? 

“This current climate is at or near the top of competitiveness I’ve seen in my career,” says Lanz Camacho, Flyhomes Client Advisor Lead in the Bay Area, who has been an agent in the area for almost two decades. “Many homes are getting twenty to thirty offers.” 

Because competition is essentially guaranteed, many sellers are using the listing strategy of under pricing homes. This tactic is intended to drive up the home’s sale price—buyers offer as much as they’re willing to pay instead of as much as the home is worth according to comparable sales. 

“You almost never see a home listed at comp value in northern California,” he says. “And value estimates online are oftentimes still lower than we find through our research.” 

Lanz says under pricing by five to ten percent is typical across the Bay Area and as much as ten to twenty percent is unsurprising in the hottest areas. Sometimes, the gap between list price and sale price is even wider. He recently helped a client who loved a home that sold for almost forty percent more than the list price. It was priced at about $1,100,00 and sold for about $1,500,00. 

In an extreme example, one Berkeley home was listed in March for $1,150,000 and is expected to close above $2,000,000, per the listing agent. Even she was astounded at the huge difference —she told Lanz’s teammate, whose client made an offer, that she expected it to sell closer to $1,700,000.    

The Bay Area isn’t the only place where the under pricing trend is common. Flyhomes Client Advisor Jack Schwabeland sees it in Seattle, too. 

“We are deeply into a seller’s market right now,” he says. “Buyers have to be prepared to do what it takes to get a home. At the end of the day, it’s going to boil down to whether you like the home enough to pay more than the next person … and they’re probably willing to pay a lot.” 

Be sure to discuss the gap between what a home is “worth” and the sale price with your agent. There are pitfalls they can help you understand. 

For example, when you buy a home at a price that’s been driven up by competition, you may risk a low appraisal, which can cause you to pay more at closing than you were planning to cover the gap. There are other ways to deal with a low appraisal, but in today’s market, it’s smart to talk with your agent about working this potential payment into your budget. 

What’s it like to be in a real estate bidding war? 

While every situation is different, let’s take a look at a recent multiple-offer situation to set the stage for what it’s like to buy a home in the current market. 

Trina Daniels, the Flyhomes Client Advisor Lead in Southern California, has been helping people buy and sell homes for more than 20 years. At the end of February, she listed a single family home in La Mirada for $740,000. She knew competition would be hot, but she wasn’t prepared for what happened: the seller received 45 offers! 

Here’s how it went: 

The big takeaways here are that buyers in today’s market need to expect competition and work with their agents to move quickly, consider waiving contingencies, and start with their strongest offer. 

How to approach homebuying in a hot market

Even in such a crowded market, you can buy a home you love. By using your agent’s local expertise and setting yourself up with realistic expectations, you’ll have more success and less stress. 

Keeping an eye on the latest market updates will help you track what’s going on for buyers, too. The more educated you are, the more confident you’ll be about making the big decisions that lead to your new home. 


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