Bidding Wars and Aging in Place: Spring 2021 Insights

The Douglas County market has continued tightening through April 2021. Inventory has fallen to 1.1 months, the slimmest supply we have seen in well over a decade. Average sale prices are up 21.2% year over year, and total market time has dropped to 43 days. It is not unusual for a seller to receive 5 to 10 offers when there is very little inventory on the market. Here is what that looks like up close, with two recent case studies from Sutherlin.

Bidding Wars: A Case Study

A bidding war occurs when a home seller receives multiple offers. Since receiving multiple offers is fairly common in this market, it pays to plan ahead. You will reduce surprises and stress, and be better prepared to negotiate. For instance, we counsel both buyers and sellers to consider how sellers can respond to multiple offers.

Sellers typically have four options:

(1) Counter all offers by requesting each buyer submit their "highest, best, and final" offer, then choose the best. (2) Accept one of the offers outright. (3) Decide to negotiate individually with different offers (until reaching an agreement with one buyer). (4) Reject all offers and wait for new ones. (It happens, though very rarely.)

Other details that can affect a buyer's offer:

Sellers realize that the highest offer is not always the best offer. Terms also make a big difference. Sellers know the appraisal could be a problem; just because they accept a huge offer does not mean the appraiser will agree, so sellers may ask for funds to make up the difference. Buyers can consider adding an escalation clause to their offer, which states the buyer will automatically increase their offer by some amount over and above the highest competing buyer, up to a certain cap.

Case Study 1: 783 Fir Vista Rd, Sutherlin

List date: 3/3/2021. List price: $435,000. Showings: 17 separate buyers. Offers: 7 over list price. Requested highest and best? Yes. Sold date: 4/30/2021. Sold terms: CONV loan. Sold price: $450,000 (+$15,000).

Case Study 2: 487 Fir Vista Rd, Sutherlin

List date: 3/31/2021. List price: $370,000. Showings: 33 separate buyers. Offers: 10 over list price. Requested highest and best? Yes. Sold date: 5/13/2021. Sold terms: CASH. Sold price: $475,500 (+$105,500). Both properties are in Sutherlin, a market that has seen some of the strongest buyer demand in Douglas County this spring.

For Buyers

Sometimes homebuyers wonder if it is even worth trying to compete against other buyers in a seller's market. It is not unusual for a seller to receive 5 to 10 offers when there is very little inventory on the market. The most important thing you can do to ensure you have a chance is to write your best offer upfront and submit all the required documentation to prove you are a qualified buyer.

For Sellers

Multiple offer scenarios must be handled correctly and carefully in order to provide every buyer an opportunity to submit their best offer. As a seller, it is important to allow the process to work and resist becoming greedy. Patience and a well-executed pricing and marketing strategy is the name of the game in this market.

Real Estate: Douglas County Market Snapshot

Comparing 2021 to 2020 through April, the average sale price has increased 21.2% from $242,500 to $294,000. In the same comparison, the median sale price has increased 19.9% from $221,500 to $265,500. Inventory increased to 1.1 months in April. Total market time decreased to 43 days.

For 26 straight months, from April 2018 through May 2020, Douglas County maintained roughly 3 to 4 months of inventory, the kind of steady supply that gives both buyers and sellers room to think. Starting in June 2020 the floor dropped: 3.2 months in May fell to 2.0 in June, 1.9 in July, 1.5 in August, and 1.1 by December. In twelve months, inventory was cut by roughly two-thirds, and we have not climbed back since.

Paying Your Mortgage Off Early

Paying your mortgage off faster makes you more secure, and saves you tens of thousands of dollars (possibly hundreds of thousands) in interest. If you could knock 5 or more years off your mortgage, that is 5 years sooner you can retire, or 5 years' worth of payments you can use to enjoy retirement. Here are five common approaches to accelerating your mortgage. The one you choose depends on your financial situation.

Divide a single payment by 12.

Add that amount to each monthly payment to make one extra payment a year.

Make an extra house payment quarterly.

Doing this can pay off a mortgage as much as 10 years earlier.

Pay half of your payment every two weeks.

Also known as bi-weekly payments.

Round up your payments.

Pay at least a few extra dollars a month.

Increase your payment with a windfall.

When you get a raise, bonus, or other windfall, apply it to your mortgage.

When you make extra payments, be sure the extra payments are applied directly to loan principal only. Otherwise, the lender may credit your payment towards your entire monthly PITI mortgage payment. Feel free to call, text, or email if you need a reference for a superior lender.

Aging in Place

Chances are, you have heard the term "aging in place." Simply put, aging in place means choosing to remain at home instead of moving to a senior living arrangement. The U.S. Centers for Disease Control and Prevention defines aging in place as "the ability to live in one's own home and community safely, independently, and comfortably, regardless of age, income, or ability level."

Most adults would prefer to age in place, that is, remain in their home of choice as long as possible. In fact, 90 percent of adults over the age of 65 report that they would prefer to stay in their current residence as they age. One-third of American households are home to one or more residents 60 years of age or older.

Home Modifications for ADA Compliance

If you or someone you know plans to age in place, then adding safety and convenience features to your house now can make it easier to stay longer. Homeowners often worry that incorporating those features will be unattractive, complicated, and costly. Here are a few suggestions for getting what you need without sacrificing aesthetics or breaking the bank:

Stair lifts.

For homeowners living in two-level homes, a stair lift can be an option. While you cannot completely hide a stair lift, you can have folding seats and footrests so they tuck away out of sight better.

Folding shower benches.

Using a folding shower bench made of teak and chrome can create a more classy appearance than plastic.

Lever-style latches.

Door, window, and cabinet latches can be replaced with options that someone with arthritis can manage (lever door handles, etc.).

Wooden railings and grab bars.

Wooden railings and grab bars instead of chrome can add support options where necessary and practical, without making the home look industrial.

Smart appliances.

Adding smart technology to appliances can reduce accidents (leaving the stove on), and improve accessibility (turn lights and fans on or off).

Pull-out drawers and cupboards.

Replacing drawers and cupboards with pull-out options makes it easier to reach things.

There are many more possibilities to consider. Do some research about home décor and aging in place for more ideas. Let us keep our parents and ourselves at home as long as possible as we age.

What to Upgrade (or Not) Before You Sell

If you are thinking about making upgrades to improve your home's value, you should know which upgrades will recoup their value and which will not. Start with a no-obligation walk-through and home valuation so you know what is actually worth doing for your specific market. If the work needs funding, our Strategic Improvement Program coordinates the upgrades and reimburses the costs at closing, so you pay nothing out of pocket. Text, call, or email anytime for a copy of the full report.