There might not be a better time to buy or sell a house than right now. Despite the coronavirus pandemic and recession, the real estate market is booming with buyers taking advantage of record-low interest rates and sellers potentially receiving a higher value on their house due to demand.
It is what you call a “seller’s market,” meaning the demand for houses is larger than the actual supply or inventory. Eager buyers and the shortage of listings have led to quick sales and even competition for homes.
President of the Arkansas REALTORS® Association and executive broker for Coldwell Banker RPM Group, Carolyn Cobb, tells AY About You that this is the best time to sell in the state, especially in the populous areas of Northwest and Central Arkansas.
“The inventory for new houses, or houses in general, is down. We need listings,” Cobb says. “It seems like people are lining up to show it as soon as it goes on the market. I have seen an offer come in the first hour and up to as many as 10 offers a day.”
There are three key things to consider when selling your home: location, price and condition.
“You can’t change the location, but if the price and condition is right then it will usually sell the first day,” Cobb says.
The common mantra in real estate is “location, location, location.” While a good location can mean different things to different people, the fact is that the value of a home is largely determined by it. Consider factors such as neighborhoods, school districts, accessibility to local amenities, transportation options and future developments nearby.
On the seller’s side, Realtors help price houses by determining the value, similar to what an appraiser would do.
“I conduct a comparative market analysis with the multiple listing service and check several different things like area, inventory in the area, desirability, square footage and more,” Cobb says, adding that overpriced houses sit stagnantly on the market.
It is important to price accordingly to attract potential buyers. Houses in better condition are also more appealing, making it easier to market.
“If you allow us to look at it, we can give you a different perspective from a buyer’s eye,” Cobb says. “Declutter, clean and maintain the home and yard before listing it so that it is ready to go when you do.”
While it may be a seller’s market, Cobb also points out that “buyers are smarter than they’ve ever been,” because most are working with a Realtor and using the internet. CNBC reported in August that searches on Google with the phrase, “Can you use your 401(k) to buy a house?” were up 2,800 percent in the three months prior. Searches for “process of buying a house” and “minimum credit score to buy a house” were also increasingly popular.
On the buyer’s side, Realtors help individuals make one of the biggest financial investments in their life by buying a home.
“It starts off almost like an interview process to see what you are looking for. We ask about what you need and want in a house, the timeline to purchase, and more,” Cobb says. “We advise you through the process and go look at homes to see any areas to improve on. There might be a stress crack or things that need to be fixed, so we can tell you what these things are and guide you.”
She also adds that individuals should not look until they are ready to purchase because the inventory will be completely different in 30 days. Although houses are flying off the market, the supply continues to fall with new listings and the active inventory for sale down.
Redfin, a technology-based real estate brokerage, reported that the “active inventory of homes for sale was down 28 percent, falling to the lowest point since the National Association of Realtors and the government began tracking this data in 1999” during the four-week period ending Aug. 2.
“The dynamics of the market and the coronavirus have just made everyone cautious, but people are still purchasing houses,” Cobb says. “When we list a house, we visit with the owner to see what they are comfortable with and how they want to handle showings. There might not be as many open houses to the public as before, but we practice social distancing, wear masks and wipe down everything when there is a showing.”
Though the pandemic may have changed the way business is conducted, Cobb says that real estate agents are using technology to host virtual meetings and tours. The Arkansas REALTORS® Association also uses Form Simplicity, an online signing system that allows e-signatures on real estate contracts.
She points out that the association is there to help and offer resources to more than 9,000 members in the state who can then better serve their clients.
“As Realtors, we do so many things,” Cobb says. “I’ve been in the business since 2002 and love it. It is so rewarding to help families with, usually, their largest purchase. I recommend that everyone use a Realtor since they have the training and must follow a code of ethics.”
Cobb shares the following advice:
“Choose wisely and do research before hiring a Realtor, but you should not buy or sell a home without one because it can be a nightmare. It is also common for relationships to form since the process is very much personal. You need to have confidence and communicate throughout it.”
Individuals have the option in Arkansas not to be represented by an agent when buying or selling. However, they might be able to get a better deal with one than without. According to the National Association of Realtors, for sale by owner (FSBO) homes accounted for 11 percent of the total home sales in 2018 with “the typical FSBO home sold for $200,000 compared to $280,000 for agent-assisted home sales.”
With a hot real estate market right now for both buyers and sellers, it might not be a bad idea to consider making the next move. Cobb says the real estate timeline is “usually a 30-day process from making an offer to closing, depending on the type of loan and other factors.”