Lake Minnetonka homes for sale are a lot like those in other markets across the country. Searching for a home is a process – and it can be a painstaking one in a competitive real estate market. With fewer houses for sale and more potential buyers than sellers, it's a classic scenario of the law of supply and demand. When the supply is low and the demand is high, the competition heats up. Let's examine ten signs to know you're in a competitive housing market.
Lake Minnetonka Homes for Sale Spur Competition
1. Cash – as always – is king. You know you're in a competitive market when there are cash offers made by prospective buyers vying for the same house. Because cash is so "immediate" and usually contains no "strings" or "red tape," most sellers are more partial to cash offers than those involving a mortgage. Assuming the sales price and resulting offer is the same or fairly close, a cash sale will usually win every time. It's hard to compete with a buyer who's ready to pay cash and forego the time it would take for a loan to be processed and approved.
2. Expect war – a bidding war. When competition is stiff, usually every player brings his "A game." What makes the competition both interesting and stressful are the lengths that prospective buyers go to get what they want. Usually that means outbidding any and all competitors. Most real estate agents agree the Lake Minnetonka homes for sale over which bidding wars are waged are those that have a combination of three unique features. Sellers with houses attractively priced, in very good condition and in a great locations are likely to find themselves the beneficiary of multiple offers. Best of all – at least for the sellers – is that each offer is usually surpassed by an even higher offer.
3. If your city is popular, you can expect to pay more. Remember when you were renting? The newest or most popular apartment complex always had a waiting list. That's because its popularity spread and with it the demand for living there increased. Cities and metropolitan areas are similar in that respect. A progressive, popular, "in place" to live usually benefits in a higher-priced housing market. Real estate experts say the keys to look for are where certain industries are locating, since jobs will be created. The growing technology sector is a good example. In cities where that industry has grown, so have the outlying communities and the housing prices. Analysts also recommend looking for trendy retail stores, coffee shops, restaurant chains, niche-market grocery or health food stores and yoga and fitness centers.
4. You start hearing about "escalation clauses." If you're beginning to understand for the first time in your life exactly what an "escalation clause" is, you're probably in a competitive real estate market. A bid you may submit to purchase a home you have your eye on may include an escalation clause. Simply put, it means you're prepared to increase your offer up to a specified maximum in order to outbid other buyers. Not only is it a time-saver because you and your agent don't have to go back and forth with the seller, it demonstrates to the seller that you're serious about buying his home and paying whatever it takes – within reason – to be the successful bidder.
5. You may have to go the extra mile. Buying Lake Minnetonka homes for sale can be an emotional experience, for sellers too. And included in that emotion are often ideas that accompany offers designed to give buyers an advantage over their competition. A savvy real estate agent can assist you greatly here. Knowing what will motivate a seller or knowing when they want to close or move is one way a buyer can potentially gain an advantage. In addition, playing to a seller's heartstrings sometimes works, too. For example, buyers who write a personal letter outlining why they want to buy the home and raise their children in the neighborhood that was so important to the seller and his family may find themselves closing the deal.
6. If the sales price exceeds the asking price. Again, it's simple supply and demand. If there's greater competition for the same house, not only are there bidding wars and escalation clauses, many times there are offers that are higher than the home's listing price.
7. More than one offer – from a variety of purchasers. Multiple offers are a lot like being in an auction. As soon as one offer is made, another higher offer follows – then others after that! Naturally, that's a telltale sign that you're in a competitive market with Lake Minnetonka homes for sale.
8. The cupboards are bare. Ever been to the grocery store when a storm or other weather event is expected? Many of the popular staple foods like bread, milk, or bottled water may be in short supply. Other shoppers have beat you to the punch and bought their selections first. It's the same with a tight real estate market. You may search online for homes in a certain market, only to find they, too, are in short supply. Usually that means the remaining homes on the market are being viewed and visited by a larger number of people – all vying for the same purchasing opportunity.
9. The "ripple effect" in adjacent neighborhoods. In popular neighborhoods, it's not unusual for areas nearby to enjoy the "ripple effect," allowing those neighborhoods to enjoy increased interest and higher sales prices.
10. Deadlines. One of the more popular selling tactics in a competitive market is to set a deadline or cutoff date whereby any and all bids must be submitted. The seller, of course, isn't obligated to accept any of the bids, but usually if there are multiple bids, chances are there's at least one that will be selected.
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