Long Island’s real estate market is hot, but that doesn’t mean home sellers have it easy. Bids from buyers may fail and sellers may be faced with difficult decisions such as abandoning an accepted bid in favor of a higher price.
To help sellers get the best price for their homes and avoid problems, Newsday Live broadcast a question-and-answer session with local housing experts as part of its Hot Market Tips web series.
The virtual session, moderated by Newsday presenter Faith Jesse and residential real estate reporter Maura McDermott, included Jonathan Miller, president and CEO of Miller Samuel Appraisers in Manhattan, and Monica Balsan, real estate saleswoman at Daniel Gale Sotheby’s International Realty in Stony Brook.
Answers have been edited for length and clarity.
In this bustling market, should home sellers âtest the marketâ by putting their property up for sale at a high price?
Miller: The quick answer to that is no. If someone offers a price that is not what the market supports, they may not get a mortgage. This is a market where properly priced homes move very quickly, but improperly priced homes stay long enough.
Vendors are inundated with offers. How can they know which one to accept? Is it just about choosing the highest price?
Balsan: It’s not about choosing the highest price. Other factors include whether the buyer is pre-approved for a mortgage, down payment terms, whether buyers should sell their own home, and when they want to close the sale.
Let’s say a seller has accepted an offer but hasn’t signed a contract, then a much better offer comes along. What are you telling them to do?
Balsan: I always recommend that we keep showing until the contracts are fully signedâ¦. If a higher bid comes in, sometimes the seller will ask the first buyers if they would like to meet or beat that second bid price. Other times the salespeople just want to go with the first person to come to the table. Some people don’t want to go into a bidding war or do this to other people, especially if a buyer came in right away and got an inspector right away.
Miller: On Long Island earlier this year. four out of ten homes sold after bidding wars. And so you can see the intensity of the market and how important it is for a seller to be ready to make a decision as to whether they want to stick with the market. [first offer] or not.
What if a seller accepts an offer, but the rating drops below the offer and the buyer asks the owner to accept a lower price?
Balsan: I just did this, the appraisal was less than $ 100,000 from the bid price. Buyersâ¦ tend to come back and ask the owner to adjust the price to the appraisal price. Sometimes sellers do. In my case, the seller didn’t and the buyer was willing to pay the difference.
Some homeowners may be wondering if this hot market is about to calm down. Should sellers rush to list their homes now?
Miller: I don’t see this as a short-term situation. we do not expect some kind of rate hike in the short term. That being said, if you are looking to sell, there is currently the lowest stock on record. We also have a generational shift, where we have millennials flocking to the buying market, coming out of the lockdown pandemic and finding these rates low and seeing the opportunity. So there are a lot of forces at work.
With the demand for homes so high, can you advise us on which home repairs and upgrades are worth it and which are not?
Miller: The first step for any seller is to try to imagine a buyer walking to your front door, and what does he see? Look at the yard, look at the landscaping. Rather than big repairs, it’s really about making sure the house is painted, it’s very neutral in the sense of removing clutter. There really aren’t that many repairs out there that are really needed just because the inventory is so low. We really don’t advise sellers to remodel a kitchen or remodel a bathroom.