The global pandemic first hit hard on the USA toward the end of March of 2020. As experienced, the following months were filled with uncertainty and fear. Real Estate, however, was considered essential work, which meant that we, as licensed real estate agents, were allowed to continue our practice. Many clients, as a precaution, decided to stop the search until further notice. Still, others were active, always following guidelines of protection against COVID-19. Thankfully, these months were filled with success as we could ratify over 7 contracts, including buyers and sellers. But these were also months of preparation to study the market and sellers’ and buyers’ behavior to be ready for the wave of demand that would follow it. As many specialists predicted, once the stay-at-home orders started to lift in the DMV area, many buyers reactivated the search. They were as ready as ever to compete for the best properties as people learn from the pandemic the luxury of having space in your home.
My clients for this transaction were a delightful young couple looking to purchase their first home together. They had contacted me a year before to help them as their real estate agent, but it wasn’t until after the pandemic that they decided to start the search. They were not particularly looking for something large but preferred to find an area that could offer them anything they would need within a 5-mile radius. We went to visit many properties together for a couple of weekends. Still, it was not until an Open House that they went to and saw this beautiful townhome located in Capitol Hill’s neighborhood. The property had been renovated, it had a spacious back patio and a front porch, and most importantly, it was located close to many entertainment areas, including local parks, coffee shops, restaurants, and public transportation, safe to say they fell in love immediately. They called me interested in the property and asking for my advice. However, I knew that we needed to be prepared for the deadline of offers given the market’s behavior and all the beautiful things the property had to offer. As always, I prepared a market analysis, which consists of finding and studying similar properties in the area that had been sold or were under contract for the last couple of months. This helps assess buyers’ behavior in the area and best estimate the purchase value of the property. This townhome was well priced; however, because of the high demand, the value could and would go up. My role as a real estate agent in this process is to educate my clients on how paying above or below market price can affect them financially. For example, in a transaction where an appraisal and financing contingency do no take place, your must be extra cautious with the price you are willing to pay because if you offer is above the asking price and the appraiser determines the property is not worth that amount you risk having to pay out of pocket for the difference.
For this transaction, my clients worked with a trusted lender but only had 10% downtown; therefore, we needed to be clever with the offer to submit. When the deadline day came, the listing agent informed us that there were 5 competitive offers. Upon realization, we immediately took charge and increased the price to what our market analysis had found to be fair and what the clients had agreed on, which meant going over $25,000 the asking price, always keeping the appraisal and financing contingency which protects the clients in case the property is not valued at that price. After an entire afternoon of negotiations, we received the notification late that night that our offer had been accepted and we were ratified. Even in a competitive market, my clients were able to ratify their first offer submitted.
I am confident this year strengthen the abilities of all real estate agents in the area. It was incredible to see how the behavior changed for both buyers and sellers after the global pandemic put people’s life into perspective. We saw an increase in demand and, therefore, an increase in price that I had not seen before in my years of experience. This is why I was so thankful that we could get my clients their home on the first try; although they did not have a competitive down payment, it was their willingness to listen and learn about the real estate market that helped them accomplish their goal.
Interested in learning more about the home buying process? Contact Us!
Please fill out the form below and we will be in contact shortly