This regularly-scheduled sponsored Q&A column is written by Val Sotillo, Northern Virginia-based Realtor and Falls Church resident. Please submit your questions to her via email for response in future columns. Enjoy!
Question: I’ve submitted two offers on homes in the past couple of weeks and both times lost to multiple offers. Is the inventory going to increase? What can I expect as spring is approaching?
Answer: Periods of low inventory and high demand, like what we’re currently experiencing, can be frustrating for buyers. If you’ve been looking for homes and are concerned about the lack of options you’ve seen in the market, do not give up because the inventory is already increasing and will continue to increase over the next few months.
What To Expect From The Spring Market
The spring market can be a great time for buyers because you’ll see a significant increase in inventory and a better chance of finding that perfect home.
You will also see a very similar increase in the amount of properties going under contract, which is an indicator of the not-so-good news (for buyers) that there will be a lot more competition. Be ready to make your best offer.
See the chart below for a month to month breakdown on New Listings in Fairfax County since 2014. This chart highlights how the lack of new inventory you’ve seen over the winter is going to increase significantly starting this month and will almost triple over the next few months.
See the chart below for New Pending Contracts (properties going under contract) in Fairfax County since 2014. Contract activity is seasonal, just like new inventory.
What Can You Do To Get Ready For This Market?
Spring can be a frustrating season because you may watch your dream home go to other buyers who have made smarter, but not necessarily higher offers. So be prepared to make a strong offer with these tips:
- Financing — Have a pre-approval letter from a reputable local lender who has reviewed all relevant documents and is able to close quickly. A strong lender letter gives the seller confidence you will close on the home on time, without complications.
- Don’t Play Games — We all want to negotiate a great deal, but when a seller has multiple similar offers, they often put more weight in who they think is most likely to close with the least complications. In that scenario it pays off to make it clear how much you want the home instead of acting like you could take it or leave in an attempt to negotiate a lower price. This is not a hagglers market so don’t expect a lot of negotiations.
- Contingencies — Understand how an Escalation Addendum works and consider giving up your right to negotiate repairs using a Pass/Fail contingency or doing a pre-inspection instead to make sure there are no major issues with the property. You can also offer to cover up to a certain dollar amount in the event of a low appraisal, if you are offering to pay above the asking price.
Good luck on your house hunting! If you’d like more information, or would like a question answered in my weekly column, please reach out to [email protected]. I hope to hear from you soon.
Val Sotillo is a licensed Realtor in Virginia, Washington DC, and Maryland with Real Living At Home, 2420 Wilson Blvd #101 Arlington, VA 22201, 703-390-9460.