Just about every article on Portland's real estate market seems to suggest that the secret is out: our city really is as cool as those two goofy comedians with birds on things were saying. And not just that popularity is gaining, but that our fair city is experiencing growing pains (yikes!). A recent publication by Metro just this month indicated that inbound migration to Oregon accounted for 66% of the moves to and from the Beaver state, and that was only in 2014. By the middle of 2015, it was evident that the metro area was trending toward a population explosion.
The most typical stressors buyers have complained about were not just costs of housing, but the feasibility to buy a home with the various market constraints and competition. The biggest culprits? Low housing inventory and saturation of buyers in the market. Reminiscent of Portlandia's episode of "House For Sale" (where buyers attempt to beat each other to open houses and pour their hearts into letters to the sellers), it's no secret that the number of properties available is only satisfying a fraction of qualified buyers in the market. According to the Regional Multiple Listing Service, the inventory in the greater metro area decreased in December 2015 to 1.2 months worth of available listings, the lowest figures seen since 1999. Suffice it to say that Portland housing has surpassed Salt & Straw's round-the-block popularity.
But before buyers resign their efforts of finding their ideal home, it's important to note that the average number of homes sold in 2015 increased 20% over the previous year, a sign that seller confidence continues to grow as home values rise. Here are a few important things to consider to gain a competitive edge:
[write a letter]
But unlike Carrie and Fred's indiscernible scribble, do make it clear and legible. Keep it short and sweet, focusing on what qualifies you as the most ideal buyer. Find commonality with the seller. A buyer of mine once noted that she and the seller had connections to New Orleans and her letter reflected their shared nostalgia for the Big Easy. The letter is not solely a place to tell your life story. Sellers value knowing who they're passing the torch to, but consider their arduous task of reading a stack of letters. Put yourself in their shoes - what would compel me to sell to you versus the next aggressive buyer? In short, let your letter be your explicit message that you've considered their closing needs and express willingness to accommodate them. My New Orleans buyer got creative by offering to provide the sellers with an authentic King Cake annually during Mardi Gras for years to come! The purpose is to remain authentic, believable and to never over-promise and under-deliver.
[don't be afraid to ask the seller(s) for what they want]
This topic is sometimes controversial, but it never hurts to suss out the terms and conditions that accommodate the needs of the seller(s). It can not only take some mystery out of writing the most attractive offer, but also shows willingness to work cooperatively toward a mutual goal: a smooth closing. Cooperation is key: It communicates to the seller(s) that the next 30 to 45 days of their lives are likely to be manageable in an often stressful period. Think of compliance with seller requests as your opportunity to set the foundation to be able to ask for favors during repair or appraisal negotiations if your contract prevails. It's not always possible to satisfy every seller demand, so discuss with your Realtor and lender what resources are at your disposal. Flexibility, creativity and a little risk-taking are key to getting noticed by sellers and prevailing in this market.
[it's not all about price]
...but it has a lot to do with it. Although one cannot dispute that "cash is king" these days, not all bidding wars include offers of suitcases full of greenbacks. It's certainly true that dollar signs get sellers attention, but a real estate contract contains 11+ pages of terms and conditions that are influential elements in any sales agreement. It's important to talk with your Realtor about how to leverage your resources to your competitive advantage. Has the seller secured their next housing situation? Is your offer higher than the house is predicted to appraise for? Again, put yourself in the shoes of the seller and examine how you can feasibly accommodate their needs as are also transition housing. Having a savvy and experienced Realtor to help you explore and understand the implications of writing competitive terms is what can set you apart.
[your Realtor has something to do with it]
Not only is your representation's ability to understand (and communicate to you) how to put together a creative and competitive offer key to your success, but so are their people skills. Real estate is inherently a field largely based on relationships. Your agent's duty to you is to represent you in the highest standard with your best interests in mind. The agent with high levels of communication, patience and transparency is not only going to make you, the client, more comfortable and trusting throughout your transaction, but your counterparts, the sellers, as well. Your best ally throughout the buying and selling process is someone that is personable and level-headed enough to professionally deal with even the most challenging transaction scenarios.
[practice makes perfect]
If there's one thing that I love about the buying process, it's watching my clients' unique evolution into home ownership. I would even go as far to say that by the time an offer was accepted, a few of my clients were self-described Jedi-writers. It didn't take long before they were experienced enough to ask the right questions and were not afraid to represent competitive terms. Realistically speaking, buyers may write nearly half a dozen offers before closing on "the One." But throughout each process they take great leaps of faith, gaining wisdom about the market and themselves. Sometimes the learning curve is necessary to gain the competitive edge.
The great news is that this list isn't exhaustive by any means. Special properties and circumstances call for creative offer-writing and new strategies are tested daily. Do you have a unique approach to writing offers or great feedback from a seller point of view that you'd be willing to share with potential buyers? Please post in the comments section!
Want to know more about how to write compelling offers? Feel free to drop me a line! And don't forget to follow my page on Facebook for great home improvement tips and the latest market action. Download RMLS Market Action Report for December 2015 HERE.