What is an Appraisal Gap and Why Are They Happening Now?
In today’s real estate market, low inventory and high demand are driving up condo and home prices. As many as 54% are getting offers over the listing price, based on the latest Realtors Confidence Index from the National Association of Realtors (NAR). Shawn Telford, Chief Appraiser at CoreLogic, elaborates:
“The frequency of buyers being willing to pay more than the market data supports is increasing.”
While this is great news for today’s sellers, it can be tricky to navigate if the price of your contract doesn’t match up with the appraisal for the condo or house. It’s called an appraisal gap, and it’s happening more in today’s market than the norm.
According to recent data from CoreLogic, 19% of homes had their appraised value come in below the contract price in April of this year. That’s more than double the percentage in each of the two previous Aprils.
The chart below uses the latest insights from NAR’s Realtors Confidence Index to showcase how often an issue with an appraisal slowed or stalled the momentum of a sale in May of this year compared to May of last year.
If an appraisal comes in below the contract price, the buyer’s lender won’t loan them more than the condo or house’s appraised value. That means there’s going to be a gap between the amount of loan the buyer can secure and the contract price on the property.
In this situation, both the buyer and seller have a vested interest in making sure the sale moves forward with little to no delay. The seller will want to make sure the deal closes, and the buyer won’t want to risk losing the home. That’s why it’s common for sellers to ask the buyer to make up the difference themselves in today’s competitive market.
Bottom Line
Whether you’re buying or selling, let’s connect so you have an ally throughout the process to help you navigate the unexpected, including appraisal gaps. Contact us at The Bouma Group today at 734-761-3060 or info@condohotline.com.
Exposing the 4 Factors Agents Use to Price Your Condo Right
Key Takeaways:
- Before you list your condo, it’s crucial to understand how much a buyer would be willing to pay for it.
- Your agent will use a variety of factors to determine a competitive list price—and some of them might be a little unexpected.
- If you’re looking for a fast and accurate way to price your condo, we’re here to help. Contact us today for a complimentary estimate!
4 Surprising Factors That Go Into Pricing a Condo or Home
Pricing your condo to sell quickly—even in today’s hot real estate market—is all about balance. You want to price low enough to attract potential buyers, but high enough to profit from your equity. And while it may be tempting to use automatic estimators, it’s best to leave the number-crunching to your agent.
Need help determining the perfect price? Here are a few factors your agent will take into consideration when valuing your place.
Your condo’s size and condition
This may seem like a given, but a condo’s size, condition, and features play a huge role in how much it’s worth. Before you list, your agent will perform a walk-through to thoroughly evaluate its saleability. If your space is move-in ready and well-maintained, you’ll have more luck setting a higher asking price.
Many sellers are under the impression that big-ticket upgrades will drastically increase their home’s value, but this isn’t always the case. Before you make a significant change, ask your agent for their professional opinion. Believe it or not, smaller touches (like updating hardware or repainting) can have a better return on investment than a full-scale renovation.
Location
Real estate is all about location, and there are a few general factors that tend to boost property values. Typically, agents will price a condo or home based on local schools, nearby employment opportunities, and proximity to amenities. Houses in more desirable neighborhoods or communities also tend to command a higher list price.
Above all, most buyers are looking for condos that offer the perfect blend of privacy and convenience. Being close to (but not right next to!) highways or public transportation is another huge plus.
Other recently sold condos
One of the best indicators of your home’s value is the sale price of other listings in your complex or neighborhood. Your real estate agent should conduct a comparative market analysis—abbreviated as CMA—to see how your home stacks up against the competition. By looking at recently sold listings that are similar to yours, they can calculate a fair and accurate price.
After your agent has assessed your condo, they’ll likely send you a CMA report that contains their projected price, along with data from other comparable condos. A great agent will also be available to answer any questions, too!
Current market trends
Even if your condo is in perfect condition, in the best location, and boasts quite a few upgrades, the current state of the market can have a huge impact on its overall value. And in today’s seller-driven market, many homes and condos are now worth more than ever before.
In most areas we are seeing a large upswing in average sale prices. If you want to take advantage of these unbelievable conditions, now is the time to list—and we’d love to help!
Get Your Updated Home Value
Whether you’re just curious or are ready to sell, you can trust our team to calculate your condo’s true market value. Request a free valuation today, or reach out to us at 734-761-3060 or info@condohotline.com to learn more about 2021’s hot real estate market. There’s never been a better time to list!
These 4 Negotiating Tips Can Help You Sell for Top Dollar
Receiving your first offer is one of the most exciting parts of selling your condo or home. And while it might seem like the hard work is finally over, the negotiation process is actually just getting started.
Even in a seller’s market, negotiating with a buyer can require quite a bit of time, skill, and guidance from your agent. However, with the right strategies, you can remain in the driver’s seat and maximize your profits.
Here’s How to Negotiate with Potential Buyers
When buyers submit an offer, they’re trying to get the best possible price, secure specific contingencies and financing, and close on their ideal timeline. As a seller, you’ll want to take their needs into consideration—but that doesn’t mean you have to give in to every concession.
Ready to hone your negotiation skills? Here are four easy tips to help you leverage a deal that gets you the price you want while keeping your buyer happy.
Review every offer with your agent
Even if you have some selling experience, it can be hard to decipher all the elements of an offer. Most offers are just a small part of a purchase and sale agreement, which includes everything from price to contingencies to deadlines, so it’s important to review every detail with your agent.
While it might be tempting to decline any offers below your asking price, you still want to consider the bigger picture. It may be worth sacrificing some equity for fewer contingencies or a cash deal. Your agent can guide you through the pros and cons of each offer, as well as answer any questions.
Don’t compromise on your must-haves
Fortunately, low inventory and rising prices have given sellers a distinct advantage in today’s market. That means you probably won’t have to give up a lot of your must-haves—like a certain price or closing date—to secure your sale.
While it’s okay to drive a hard bargain, you don’t want to appear unreasonable to buyers. In some situations, it’s common courtesy to agree to certain contingencies (such as a home inspection), offer credits for repairs, or even pay a portion of their closing costs.
Make a clear counteroffer
If you receive an offer that isn’t quite what you want, you have a few options. Most sellers choose to respond with a counteroffer, which proposes modified terms that are more beneficial to them.
The biggest factor to consider is price—if a buyer offers less than you’re willing to accept, try countering with a more realistic number. However, you’ll also want to take financing, contingencies, and timing into account. For example, you may want to ask a buyer for a different closing date or say no to excessive contingencies, as they can slow down the transaction. Ultimately, the ball is in your court, so it’s worth weighing different options with your agent.
Don’t be afraid to say no
Generally, you should always submit a counteroffer to every reasonable offer. However, if it becomes clear that a buyer isn’t willing to budge on your deal-breakers, don’t be afraid to say no. It’s also best to automatically decline any lowball offers that are around 30% less than your list price.
While it may seem counterintuitive to turn down an offer, it’s not worth negotiating with someone who isn’t serious about your condo or home. And because the market is extremely competitive right now, it probably won’t take long to find a buyer who’s willing to pay the right price.
Thinking of Selling Your Condo or Home Soon?
If you’re looking for the right agent to guide you through the negotiation process, we’d love to lend a helping hand! Get in touch with us today at 734-761-3060 or info@bouma.com to learn the ins and outs of selling your condo or home—we’re always on hand to answer any questions you might have.
Turn to an Expert for the Best Advice, Especially in 2021
As we approach the anniversary of the hardships we’ve faced through this pandemic and the subsequent recession, it’s normal to reflect on everything that’s changed and wonder what’s ahead for 2021. While there are signs of economic recovery as vaccines are being issued, we still have a long way to go. It’s at times like these we want exact information about anything we’re doing. That information brings knowledge, and this gives us a sense of relief and comfort in uncertain times.
If you’re thinking about buying or selling a condo or home today, the same need for information is very real. But, because it’s such a big step in our lives, that desire for clear information is even greater in the buying or selling process. Given the current level of overall anxiety, we want that advice to be truly perfect. The challenge is, no one can give you “perfect” advice. Experts can, however, give you the best advice possible.
Let’s say you need an attorney, so you seek out an expert in the type of law required for your case. When you go to her office, she won’t immediately tell you how the case is going to end or how the judge or jury will rule. If she could, that would be perfect advice. What a good attorney can do, however, is discuss with you the most effective strategies you can take. She may recommend one or two approaches she believes will be best for your case.
She’ll then leave you to make the decision on which option you want to pursue. Once you decide, she can help you put a plan together based on the facts at hand. She’ll help you achieve the best possible resolution and make whatever modifications in the strategy are necessary to guarantee that outcome. That’s an example of the best advice possible.
The role of a real estate professional is just like the role of a lawyer. An agent can’t give you perfect advice because it’s impossible to know exactly what’s going to happen throughout the transaction – especially in this market.
An agent can, however, give you the best advice possible based on the information and situation at hand, guiding you through the process to help you make the necessary adjustments and best decisions along the way. An agent will lead you to the best offer available. That’s exactly what you want and deserve.
Bottom Line
If you’re thinking of buying or selling a condo or home this year, let’s connect to make sure you get the best advice possible. We have access to all of the real estate data out there and are constantly analyzing it so we can give our clients the best advice possible. Contact us today at The Bouma Group at info@bouma.com or 734-761-3060 and we’ll help make your real estate goals a reality.
What If I Need to Sell My Home or Condo Now? What Can I Do?
Every day that passes, people have a need to buy and sell condos and homes. That doesn’t stop during the current pandemic. If you’ve had a major life change recently, whether with your job or your family situation, you may be in a position where you need to sell – and fast. While you probably feel like timing with the current pandemic isn’t on your side, making a move is still possible. Rest assured, with technology at your side and fewer sellers on the market in most areas, you can list your condo and make it happen safely and effectively, especially when following the current COVID-19 guidelines set forth by the National Association of Realtors (NAR) and the Centers for Disease Control and Prevention (CDC).
You may have a new baby, a new employment situation, a parent who moved in with you, you just built a home that’s finally ready to move into, or some other major part of your life that has changed in recent weeks. Buyers have those needs too, so rest assured that someone is likely looking for a place just like yours. (more…)
Make Buyers Fall in Love with Your Condo with These Easy Staging Tips
Love is in the air! We’re not talking about Valentine’s Day — we mean all of the buyers falling in love with your condo thanks to these easy staging tips. From simple DIY projects to decor and decluttering pointers, these effortless staging tips will wow the next buyers that step through your front door.
Clean, Clean, Clean
The single most important step for staging success? Clean. Break out those rubber gloves and scrub every corner, crack, and crevice that you can find. Not only will a clean condo convey to buyers that you take good care of your space, but it’ll also ensure less work and fewer problems when they move in.
The home-staging cleaning process is more than just regular vacuuming, dusting, mopping, and scrubbing; you’ll need to go the extra mile. We’re talking waxing the floors, deep cleaning the carpets, polishing all of the handles and doorknobs, and more. Make an extensive list, and devote a whole weekend to tidying up.
Tackle Any Unfinished Projects
Do you have a notoriously leaky faucet that you haven’t gotten around to fixing, or a stain on the floor that you’ve been covering with a rug? Now is the time to take care of it.
Take an inventory of any unfinished projects you’ve accumulated. Whether it’s repairing a lighting fixture or patching a hole in the wall, ticking off pending projects is critical in the staging process. The last thing a buyer wants is to inherit problems from a home that they could’ve avoided.
Try Small Scale DIY
You don’t have to completely remodel the kitchen or re-tile the bathroom to make your condo stick out to buyers. There are plenty of simple and affordable DIY projects, from decor improvements to easy upgrades and repairs, that’ll make your place pop!
Need some ideas to kickstart the process? Try putting a fresh coat of paint on the walls, replacing outdated lighting, upgrading cabinet handles and doorknobs, or de-popcorning your ceiling — just a few of the many easy ways to elevate your home’s look.
De-Personalize and De-Clutter
While decorating plays a big role in catching a buyer’s eye, there’s a fine line between standing out and overdoing it. While you might like your style of decorating, buyers could find it off-putting, so keeping it neutral is key. Using house plants and seasonal greenery is always a solid option for filling empty space!
While you’re putting up that new decor, you’ll want your space to be clutter-free and open. If you have any old couches, outdated decorations, or unnecessary accent pieces, take the opportunity to get rid of them before showings start.
List Your Condo with the Local Experts
From helping you get your DIY on to handling the complicated closing paperwork, our team is dedicated to helping you have a successful and stress-free real estate experience.
Are you ready to get started on your selling journey? Don’t hesitate to give The Bouma Group, Realtors, your local experts a call at 734-761-3060 or email info@bouma.com today!
Ann Arbor Condo Report – September 2018
Good News for Ann Arbor Condo Buyers, Selling Prices are Well Below Listing Prices
Listing prices are higher than last year, but luckily for those looking to buy an Ann Arbor condo, the selling price is at least 15% below the listing price! Asking prices are a significant 27.6% more than September 2017, $252,922 versus $322,848 currently. This may be because of the decrease in the amount of listings entered, from 60 condos to 52, which is a difference of 15.4%. Although the sale prices may seem unfortunate for condo sellers, there is some good news for them! 50 units sold this September, which means that almost as many units sold as were entered into the system. This is also an increase of 6.4% compared to the 47 condos sold in last September. Additionally, condos are on the market for less days, from 33 average days on the market to 24 currently. The average selling price is $233,240, which is a decrease of 8.9% compared to the ASP $255,912 in the previous September. Looking at year-to-date statistics, there has been a rise in the amount of condos entered into the multiple listings service but a decline in the amount of sales. From 611 units sold last year at this time to 629 units sold as of now, this is an increase of 21.3%. The average listing price has risen 19.5% to $347,344 so far this year, compared to $292,271. Thus far in 2018, 427 condos have been sold, which is a decline of 13.5% from the 494
condos sold last year at this time. The ASP has seen an increase of 14.3%, from $252,867 to $288,938 at the moment.
Whether you are looking to buy or sell an Ann Arbor condo, contact the condo specialists today at 888-581-6923 or email info@condohotline.com. Stay tuned for more updated market statistics!