Make Your Best Offer: IS HOME BUYING SEASON 2013 IN THE BAG FOR NEW ORLEANS? by Wayne D. Lewis, Sr.

Theme: Trying to re-capture missed opportunities from the 2013 Home Buying Season

If you did not have an opportunity to discuss when the home buying season began in the New Orleans area, please refer to my blog post, entitled: New Orleans and the Home Buying Season © 2013 by Wayne D. Lewis, Sr.[1]

For the sellers and buyers who missed out on the ideal home during the height of the home buying season here in the New Orleans area for 2013, there are still many great buying opportunities. The question is, how to re-capture those opportunities where both sellers and buyers walk away from the closing table, both feeling as though they acquired the king’s ransom. We will explore how to re-capture those opportunities, but first, let’s see what were some of the challenges that existed for both sellers and buyers here in the New Orleans area.

Challenges for Sellers & Buyers-

The reason that the home buying season can be unofficially declared is because (1) the football is season pretty much over. While the New Orleans Saints[2] are the team for New Orleans, there are still the playoffs, and the Super Bowl[3] that appear to keep many a home buyer from venturing out into a sea of available homes. And because this is New Orleans, Mardi Gras[4] is right in there as well, sometimes going into late March, keeping potential home buyers pre-occupied and keeping sellers on edge as to whether their home is going to sell soon. There are still other challenges that sellers and buyers had to overcome this particular home buying season. Here are four more challenges to buying and selling a home:

1. Festivals-The New Orleans area has to be one of the festival driven cultures going. There festivals to celebrate just about anything including crawfish[5], strawberries,[6] the French Quarters[7] and music [8] to name a few. While there is no intent to blame any of these festivals for buyers decision not to buy, the competition is undeniable, at best, high in the running.

2. Mortgage Rates- Going into this season of home buying for 2013, mortgage rates were teetering on going up. And while they have not risen drastically, it has been enough to cause hesitant buyers to hedge their decisions to make that move to buy their first home. A July 19, 2013 report from Yahoo News, Market Wired inquires as to whether home sales can continue to rise while mortgage rates increase.[9] Their conclusion is that despite the talk of increase rates, the rates are still historically lower than pre-depression 2008. But that still may not be a point to be taken off of the table in terms of whether buyers are hesitant.

3. Flood Insurance[10]-Most recently, Congress has been weighing whether to raise flood insurance rates. In many cases, if the rates go up, premiums could be as much as $10,000, $20,000, or $25,000 annually. This could certainly be a deal-breaker for first time home buyers, and no doubt, a deal-breaker for sellers who maybe in flood proned areas. Add to this, the possibility that existing flood policies may not be able to be grandfathered in going forward, was another important factor that may have affected home buyers’ decisions this home buying season. Refer to the National Flood Insurance Program for further details.[11]

4. Back to School!-Whether buyer or seller, whether parents or adult students, school is also an important challenge in buying and selling a home. From homework, to picking up and dropping off to not only school, but after school activities, buying and selling a home is not necessarily a top priority. The time period between school generally ending and beginning places an even greater challenge in buying and selling a home.

There maybe other factors beyond the four challenges mentioned above, but these stand out right now. The question is, going forward, how can buyers and sellers try to re-capture any missed opportunities from the 2013 home buying season, even as 2013 winds down? Let’s focus on 5 things.

A. Price-I covered this issue in my last blog (Before You Relist Your Home)[12], actually, I covered Pricing probably in every post in this blog, but particularly, if your home has sat on the market during the home buying season and no one has made an offer, it is very possible, that your home is over priced. No question about it. Re-capture a lost opportunity by reducing the price of your home according to the market. With the unofficial end of New Orleans Home Buying Season, it becomes a more of a buyer’s market, with the industry’s greatest competition isn’t just another home on the market, it’s the distractions or attractions of sports.

B. Offers-Any offer that is made must be taken with a grain of salt. If it is a full price offer at this time, still be on guard. I think a full price offer is great, but we have discussed before how to be on guard when it comes to full price offers. (See: Full Price Offer?-Beware! © 2013 by Wayne D. Lewis, Sr) [13]. Full price offers may hold several surprises, such as total closing costs as allowed by lender (6%), or painting the whole house, or close in 30 days, or void the contract. Other offers could still be low offers, but under the circumstances where we are in a possible buyer’s market, it would be to the seller’s best interest to counter the offer, reasonably. Consult your Real Estate professional regarding what would be reasonable.

C. Showings-Buyers may want to see your home at 7p.m., or 7a.m. They may want to come by in an hour, or come by in a week from today. If your home has been on the market and had not received any showings, accommodating showings is crucial. Many buyers aren’t going to be made to order. It is amazing how many buyers are truly “from out of town” and are looking to buy a home here in New Orleans. Showings are a necessary part of selling a home, and with the competition of homes that have yet to be sold, or even newer homes coming on the market, it is important to re-capture any missed opportunity to sell your home now that the home buying season will be slowing down.

D. Incentives-They should be a last resort, but incentives should be considered in selling your home. Why would you add incentives if your home is priced right? You should considered incentives such as a home warranty, or paying a percentage of the homeowners insurance, a termite contract, or even offer to pay a percentage of moving expenses. Why? The competition has been greatly increased as the home buying season comes to not only an end, but the issues that we discussed earlier are no less of a concern. Issues such as mortgage rates, even if they are historically lower, flood insurance premium are on Congress’ table, and of course, football!. Incentives may not need to be offered, but they maybe asked for. Be prepared to comply if it financially feasible. If not, reduce the price of the home, and move forward.

E. Owner Financing-Mortgage rates and financing are integrally important, but they do have their respective positions in the home buying process. Just remember that everyone cannot walk their little happy selves up to a lender and apply successfully for a loan. But, that doesn’t mean they don’t have money. It is possible that interest rates is not their concern. Some buyers have money, but they have to get past the hurdles of lender requirements. What if the seller can offer a short term option to do owner financing? If your listing does not state it specifically, update it and be prepared to entertain the possibility of a 15% -20% down payment, with a 2 year owner financing option and a balloon note to close out the deal. If all conditions work out well, the seller has taken their home off of the market, and the buyer is in their new home.

Conclusion

The above five options aren’t guaranteed approaches to re-capture missed opportunities. You may find other ways. As a matter of fact, you are encouraged to sit down and discuss with your Realtor ® as many opportunities as possible to make sure that your home does not sit on the market for the rest of 2013. There are still great buying opportunities on the market, but what will make them one of the best opportunities, irrespective of the buying season, is the ability of the buyer and seller to negotiate reasonably, both, making their best offer.

Disclaimer: Information provided here while deemed be from reliable sources, is not guaranteed. Information here is not intended to solicit the business of any broker or agent.