Home buyers continue to face competition in the market according to a new survey from Provident Bank, which has branches throughout the Greater Lehigh Valley.
But the survey also shows that most are OK with that.
According to the bank’s survey of recent home buyers, 61% said they competed in at least one bidding war during their home search.
Most of those said their winning offer was at or above asking price with more than 25% saying it was more than 10% hire. Still, 70% of respondents reported a positive buying experience.
“Our survey showed that first-time home buyers have not been scared off by the competitive housing market,” said Tony Labozzetta, president & COO, Provident Bank. “The research shows that motivators to move are largely quality of life factors like better neighborhoods, better schools, job relocation or transfer. The good news is that most have been pleased with the overall home buying process despite the competitive market.”
The survey also found that recent buyers are offering lower down payments.
Despite most respondents saying they offered less than 20% for a down payment, they had no difficulty obtaining a mortgage.
Mortgage rates are still historically low for many recent home buyers, with 31% saying their rate is between 2% and 3%.
Other findings in the survey showed that around 75% of home buyers did at least half of their home shopping in-person, while 25% did most of their home shopping online.
More than half, 55% said they think they overpaid for their home, however, 44% of respondents said they do not regret buying in the current market.
There’s no doubt that in the current residential real estate market, with low inventory and high demand, the ball is in the sellers’ court.
With several offers often competing for the same desirable home property, buyers have had to get creative to get their bids noticed and accepted by the seller.
Letters to the seller saying why they want to buy the home have become popular. Lehigh Valley area real estate agents, like Doug Frederick of Howard Hanna-The Frederick Group, said they’ve also seen such things cash offers, exorbitantly high offers, waived inspections and an offer to pay seller’s fees.
But one recent real estate transaction really took the cake – or at least the cookie.
When Kristine and Brian Parkes were looking for a home in Reading they said they’d throw in a case of Girl Scout Cookies, and put that in their official offer.
“I work for the Girl Scouts, so I have access to cookies” said Kristine Parks, who is fund director for the Girl Scouts of Central Pennsylvania.
“When we walked into the house we knew it was the house we wanted, but we know that it’s been crazy,” she said.
Parkes said she knew they had to do something to set their offer apart, and wrote a sincere letter to the sellers about how much the home would mean to them, and then jokingly added the notion that she could offer cookies.
“Everyone chuckled,” she said.
After thinking about it, however, the couple’s agent, Greg Herb, of Greg Herb Realty in Gilbertsville, said he texted the couple and asked if they were serious about the cookies, because he could include the cookies in the formal offer. He admitted he was half kidding when he started writing it up, and did it as much to bring a smile to the Parkes’ faces as anything. But when he was through, they all loved it and decided to make the offer, with the cookies.
As quirky as the offer seemed, it worked. The Parkes were chosen out of nine competing bids for the home, and while they did pay above asking price their offer was not the highest.
Herb was quick to point out that the seller’s weren’t crazy cookie addicts.
He said while everyone loves a good cookie, there were other factors, including the sentimentality of the offer and the fact that the sale would help garner a little publicity for the Girl Scouts as well as earning money for the organization.
Parkes said the sellers told her they couldn’t bear to turn down the “sweet” cookie offer.
But making it official, did pose some challenges. Since the case of cookies was an official part of the offer, it meant the Parkes had to procure the cookies within five days of the sellers’ acceptance. That was a bit of a challenge since Girl Scout cookies usually don’t come out until the first week of March.
Parkes said she had to contact the corporate office to see if she could buy some cookies direct and was able to get the cookies to the sellers on time, with the money still going to the girls.
She even threw in a couple of boxes for the seller’s agent who expressed a love for Carmel DeLites.
The unusual transaction has turned heads in the industry. Chris Raad, the new president of the Pennsylvania Association of Realtors, was impressed with the effort and said it has Realtors talking, noting that such extreme creativity in an offer is uncommon.
“The only time I’ve had anything like that was a client who offered the seller a box at a Phillies game. But, we didn’t get the offer. It didn’t work,” he said.
But even though every offer isn’t sweetened with cookies, he did say the kinds of creative ways people are trying to win competitive bids has been impressive lately.
Frederick pointed to an upswing in 100% cash offers.
“People are buying homes with no mortgage,” he said. “I had no idea there were that many people with that kind of cash.”
But he noted, every market, whether a buyers’ or sellers’ market, brings its own set of challenges and its own set of creative solutions that agents will use to get the transactions done.
“But, we certainly are seeing things in the market that we never had before,” Frederick said.
So why would such an offer sway a seller? Herb said selling a family home can be very emotional.
“It’s a very sentimental thing,” he said.
Something simple like a story about how a young family will grow in a seller’s former house may sway a seller who has fond memories of raising their own family in the house.
Knowing a piece of the sale will be going to help a nonprofit community organization is also a nice feeling, he said.
“People are going to continue to be creative,” he said.
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