As buyers look for more comfortable homes as a result of the Coronavirus pandemic, home sales nationally have jumped. This high demand coupled with low inventory has created bidding wars in many markets.
Tampa-St. Petersburg-Clearwater Metropolitan Market
According to a realtor.com survey, the Tampa-St. Petersburg-Clearwater metropolitan market is expected to outpace the national average in 2021. The real estate listing website projects an 8.7 percent year-over-year increase in the number of homes sold in the Tampa-St. Petersburg metro area in 2021, compared to a 7 percent increase nationwide. The median price of an existing home in the Tampa-St. Petersburg area is expected to increase 7.5 percent in 2021, also above the forecast national average increase of 5.7 percent. (https://stpetecatalyst.com/whats-ahead-for-the-tampa-st-pete-housing-market-in-2021/)
REMAX/Metro realtor Estelia Mesimer has been through many ups and downs of the real estate market in St. Petersburg. In a hot market, she advises buyers “to be prepared to move quickly” which in turn gives your agent the ability to act quickly on your behalf. Another strategy is to include an escalation clause as an addendum to your offer that lets the seller know that you are willing to increase your offer by a set amount if another buyer matches your offer.
Five Tips on Winning a Bidding War
- Secure lender pre-approval or pre-qualification. Figure out your loan options and get a pre-approval letter from a lender before you begin to search for a home. Some homes go under contract within days, so being able to move quickly with financing is often a plus. The letter will give you an idea of how much home you can afford, thus eliminating looking at homes out of your range. Remember: being pre-approved does not guarantee a mortgage. Be prepared to shop around with different lenders or work with a mortgage broker.
- Make your best offer. In a seller’s market, you probably won’t be able to present an offer that is below the asking price. If you love the property, present the seller with your best offer price. If you want your offer to compete with multiple offers, talk to your agent about an escalation clause that details how much you are willing to pay over competing offers. Including an escalation clause in your offer shows the seller that you are a serious buyer.
- Put down a larger escrow deposit. A larger earnest money deposit can look attractive to a seller. Check with your agent for advice on the deposit, then consider doubling or tripling that amount – you are going to pay it anyway at closing.
- Do not ask for favors. Whatever you do, do not ask the seller to give you the refrigerator or washer and dryer or paint the front door. This is a huge turnoff and a sure way to lose the deal.
- Keep Home Inspection Time Frame Short. Keep the contingency time frame short. Every contingency in a real estate contract is a potential roadblock to a seller. By making the home inspection time frame quick, you are relieving one hurdle of the seller’s plate quickly. When sellers accepts an offer, their home is off the market. In a strong sellers’ market, the last thing an owner wants is to be waiting for an extended period for the inspection to happen. Make the contingency period no more than a week.
If you are trying to buy a home in today’s competitive market, there is a chance you will run into competing offers. With some strategic planning, you can often win a bidding war by taking the right approach.
2021 Real Estate Trend – Continued prominence of working from home
“As remote work extends into 2021 and in some cases employers grant employees the flexibility to continue remote work indefinitely, expect home listings to showcase features that support remote work such as home offices, zoom rooms, high-speed internet connections, quiet yards that facilitate outdoor office work, and proximity to coffee shops and other businesses that offer back-up internet and a break from being at home, which can feel monotonous to some, to become more prevalent,” according to realtor.com’s 2021 Housing Forecast report. (https://www.realtor.com/research/2021-national-housing-forecast/)
St. Petersburg Communities
Greater Pinellas Point
Historic Old Northeast
Historic Roser Park
Isla del Sol
If you’re interested in any of these of communities or live in one and are thinking of selling, talk to The Mesimer Team.