I'm asked all of the time about how the real estate market is doing in my area.  I indicate that we have had two markets in 2007.  The market from January through July and the "new and improved buyers market".  Our market has changed dramatically in the past few months - inventories are climbing, homes are staying on the market longer, and it seems that the abundant supply of buyers has all but disappeared. 

As I was writing an offer this morning and counciling my cilents today I realized that my "lingo" has changed considerably since the first half of the year.  Earlier this year many homes would sell in less than 30 days and we would see multiple offers on homes.  If the location was right and the home was priced to sell the houses all but sold themselves. 

Since the market has changed(especially in the higher price ranges), I thought I'd do a couple of things:

1. Let's PLAY A GAME TODAY called NAME THAT PRICE. It's much more fun than work!! Share with you some of the things that I'm doing for my clients to make sure they get the best "deal" possible.  Keep in mind this is a real live scenario for learning purposes.  
2. Share with you some of the data I gather to come up with the right Ts & Cs. OF THE DEAL.    Let's get started. 

Home Information:  4 Beds, 5 Baths, 1 Half Bath.  4600 Square Feet.  Builder:  John Wieland.  Great location in the heart of Cary. Many of the homes located around this neighborhood are built in the mid-90s and are outdated.  This home is a Former Model Home built in 2004 w/lots of extra upgrades.  All brick. Gourmet kitchen and hardwood floors throughout 1st floor.  New Carpet.  Finished third floor features built in cabinetry with beverage cooler and bar sink; full bath and kids study/play area. 1st floor Study/bedroom. 3 car side entry garage. Pool/Clubhouse. Small backyard. 

More Details:  The home that I'm writing the offer for today has a list price of $784,900 reduced from $799,000.  DOM 88.  Buyer will be paying cash for the home, no contingency, and willing to close before year-end. 

1.  Know your inventory  There are 37% more re-sale listings in the Luxury Home segment this year than last.  21% of all Luxury Home closings in the Triangle this year occurred in the Cary/Apex/Morrisville market.  The average days on market for luxury re-sales is 80 days and the average for luxury new homes is 115 days. The subdivision that this home is located in is the Top 20 for closings in 2007(17).  Average Price closed in this subdivision:  $792, 263.

2.  Research Days on Market The overall market has an average days on market of 75 days, the average for the luxury segment is 97 days. For the Cary/Apex/Morrisville market in the Luxury Home Segment the average supply of inventory is 8 months and DOM = 57 based on Q32007 data. This home has been on the market for 88 days.

3.  Watch for price reductions  In this market sellers are showing willingness to negotiate on price.  At the end of 3Q ‘07 there were 664 sellers who had dropped their price compared to 389 at the end of 3Q06. 

4. Check showings in that price range  I belong to one of the largest agencies in the Triangle(over 800 agents) and we have a program that go in and check Agents Showing Property in a particular price range in a particular area.  The only caveot is that its my agencies showings.  For homes in all of Cary there were only 18 homes in the past week that were shown above 700k.  Further, all of the showings were for 2 homes that had both been drastically reduced in price.  With 100 homes above 700k on the market that's pretty bleak!! Oh yeah, and ammunition for my buyer. 

5. Check the List/Sales Price ratio Average resale price at closing 97% of List Price in the Cary/Apex/Morrisville Market.  Average List/Sales Price in this subdivision is 99% of list because the majority of the sales in this neighborhood were new construction. 

6. Request Allowances & Credits  Here are some of the things I ask for on a regular basis:  If the client is getting a loan ask for closing costs, quick turnaround on the offer so a decision will be made, a home warranty, window treatments, appliances like the refrigerator and washer and dryer, stuff you don't want that you can use as leverage at a later time--the list goes on.

7. Get creative with the financing My agency is offering a "Buyer Select Program"  that provides buyers with a free home warranty if they use our lender.  In addition, they are getting the sellers to offer things like 6 months of P&I, permanent buydown on the interest rates, and even a tiered buy-dow structure. 

There are lots of options here.  Based on the buyers confidentiality, if the deal goes through, I will not post the results until the house has closed.  If the deal falls through I will let you know where we landed sooner.