Unless you’ve been living under a rock for the last two years, you know the real estate market is having a wild time. Low inventory prior to the pandemic combined with skyrocketing building material prices and construction labor shortages simply means there just aren’t enough homes being built or on the market.
“In Kansas City, I think we have a .3 month supply of homes at the moment,” says Dani Beyer, a Kansas City realtor. “A balanced market is when we have a 6 month supply. So, there’s no inventory. We’re putting stuff on the market and we’re getting multiple offers right off the bat.”
In short — supply is low and demand is high. It’s hard to find a home right now, and it’s a seller’s market. It can be tricky navigating the market right now, which is why we talked to Dani and her team about tips to steer through it — whether you’re buying or selling.
Selling in a seller’s market
It seems like there’s no better time to sell than right now — but is it as easy as taking some photos and putting your house on the market? Dani says there’s a little more to it than that.
Find an agent who will personalize the experience for you. “It seems really easy to put a house on the market and take an offer and be done with it,” says Dani. “There’s a lot more strategy behind it. Maybe our seller wants an easy experience. We really listen to our sellers and try to get them their unicorn.”
Throw away that project list. Dani says a few years ago, staging was really important in selling a home, as well as removing items to avoid a cluttered-looking space. “But now there’s nothing for people to buy,” she says. “We’re encouraging people to list sooner than wait. Any projects that they were thinking about doing, I always tell them that that will push their timeline out. Take advantage of the situation and put it on the market now.”
Don’t wait. “Sellers don’t have to do anything at all (to their homes) because the inventory levels are so low,” says Dani. She says the most important thing right now for sellers is to get buyers in the door with enticing curb appeal and nice listing photos. “We want our photos to look great, we want our online presence to be the best as it can.”
Host an open house for competing offers. Dani says they do a lot of open houses these days, often putting homes on the market on Thursday or Friday and hosting an open house on the weekend. “We love them,” says Dani. “My goal is to have our listings appear in as many search results online as possible.” She says open houses can increase the number of offers to choose from, and also help listings stand out on real estate websites.
Buying in a seller’s market
Buying a home right now can feel like an insurmountable task, especially for first-time homebuyers.
“I just don’t think there are enough houses in Kansas City, period,” says Dani. “Our market is so affordable that there are investors, not only throughout the United States but globally that have targeted Kansas City as a place to invest. So when we put something on the market in certain zip codes up north, we know that we’re going to get cash offers from these holding companies that are coming in and buying these properties and renting them out. These companies are investing in Kansas City because they know the value’s going to continue to rise. So that makes it challenging for our first-time home buyers and people that are trying to buy their home, too, with financing — going against a cash offer.”
Sarah Montgomery, the lead buyer’s agent on Dani Beyer’s real estate team, gives some helpful tips on how to move through home-buying more confidently.
Find a lender who will work quickly. It can feel nearly impossible to compete with the rising trend in cash, as-is offers. However, finding a lender who will help you close quickly can help a buyer compete with a cash offer since cash offers don’t have to utilize lenders and are the quickest around. “Say it’s an investor’s house that (they) want to get rid of — they want to flip it and get the most money,” says Sarah. “If someone comes in with a cash offer, they can close in 2 weeks. The motivation is I want the most, quickest.” Dani Beyer and her team have been working with lenders who can close in 3 weeks, which can help compete with a cash-based 2-week close.
Add an escalation clause or appraisal gap. New tools are being utilized in negotiations when putting in an offer on a home because of the prevalence of cash offers. To combat these, Sarah has been utilizing escalation clauses, which can help a buyer automatically increase their bid to a point without going back and forth in negotiations or going over what is necessary. She also has put offers in utilizing an appraisal gap, where the buyer covers any gap between their offer and the appraisal with cash. Right now, it always helps to be cash-heavy, says Sarah.
Know the value of a great house inspector. A good inspector who gives a thorough report can be an important tool in home buying negotiations, says Sarah. “A good inspector who is super throughout and doesn’t freak out buyers is a huge asset to have there,” she says.
Work with the right agent. Finding the right realtor who represents your interests and works hard for you can make or break finding a home when there is so much competition. “Working with the right real estate agent (who) can network well, knows agents — that’s a huge advantage, someone who communicates well and actually calls the listing agent,” says Sarah. “Having that strong agent that can educate you in the process will make it a lot less stressful in general.”
