Two weeks into 2024 we are seeing signs of life in the local housing market that indicate we are looking at a healthy year ahead.
A snapshot of our local inventory shows 241 homes listed, with 37 of these in the “Members Only/Coming Soon” category, and a robust 57 homes, representing 23.7% of the current inventory under contract. With only 2 of these showing up as REOs and 3 as Short Sales, distressed listings represent only 2% of the current inventory, which is running at a relatively healthy median of 66 Days on Market, and sales prices over the past 30 days countywide are running at 99% of List Price.
At street level, I am encountering more multiple offer situations than in prior months, with terms like Non-Contingent Offers, Free Seller Rentbacks, Non-Disclosure Agreements and Sliding Offers starting to show up in the negotiations.
In Non-Contingent Offers, the Buyer waives all contingencies upon Acceptance to assure the Seller that they will not back out. Typically, they are all cash, and the Seller and their agent have put together a comprehensive disclosure package including the standard reports and inspections that the Buyer signs off on prior to presentation of the offer, which can make for a stressful realization for the winning party that there is no turning back when they find out that their offer was accepted.
Many of these offers have a short escrow timeline of 10 days or less, so in cases where the Sellers still occupy the home, it makes the process less stressful for them to offer a free rentback period. In cases where the Seller occupies the home for longer than 30 days, a Residential Lease After Sale contract is used, which resembles a typical lease, except that in many cases the Buyer (who has become the Landlord) waives any security deposit and other obligations inherent in a regular Landlord/Tenant relationship. It is however advisable to have a per diem amount that takes effect during any holdover period to incentivize the Seller to not stay beyond the agreed time.
The Sliding Offer is a strategy that gained popularity in the early 2000’s, where the Buyer states they will pay a fixed dollar amount over the highest bona fide competing offer. At one point, they became so commonplace that the CAR discouraged their use, but eventually Seller’s Brokers figured out ground rules and standards of practice to manage situations where multiple sliding offers are competing against each other, and Buyer’s Brokers developed defensive strategies such as Non-Disclosure Agreements to disable the terms of Sliding Offer which typically require the price of the competing offer to be revealed.
These types of challenges help keep us on our toes, and skilled agents will always welcome the opportunity to differentiate themselves from the masses. It has been said that a person is defined by the challenges they face and how they respond to them. And it occurs to me that a market is defined in much the same way.
