Thursday, November 6, 2008

Hey Homebuyers—Do you Have your Eye on a Real Estate SLEEPER?


You know what I mean…There is a home you have been watching for a couple of months and it is priced right. In fact, it is a steal of a deal. But you are still on the fence about buying a home and want to wait until that perfect moment. You are timing the market so to speak and waiting to see if seller of that “sleeper” is going to drop the price again. Well wake up bargain hunters…You might not be the only one with an eye on that sleeper and if you wait too long it will be gone.

A real estate “sleeper” is a home that is an amazing deal but few people, if anyone, is paying attention to it. Usually it is a great property, location, structurally sound and priced well but has not sold. In a buyer’s market where there is significant home inventory but few buyers, sleepers are abundant.

Maybe the home was originally over priced and though it is now priced very well it is being overlooked because of high days on the market statistics.

Possibly several very similar homes went on the market at the same time and in the same condition. Picture for a second, three homes listed during the same week in a cookie-cutter development where all the homes have roughly the same floor plan. All the home are the same age, condition, and priced very well, but only one homebuyer comes through the neighborhood during the next two months. So after 60 days, there are two sleepers left that didn’t sell. Since the houses are essentially the same as the neighboring home that sold, it's not that the homes aren't properly priced. This is another scenerio that will cause a sleeper in this changed market.

And then some great homes are "sleeping" on the market because…well, there is just so much darned inventory out there!

But if you are sitting on the sidelines and just watching your perfect home for another price reduction, beware. I have sold a couple of sleepers this past year throughout the north and east metro. In each case, nothing was happening on the property then BAM....we had 4-5 qualified parties interested in the home at the same time. In these particular cases, they weren’t the cookie-cutter variety either. One home in Washington County/Forest Lake area had a one-of-a-kind wooded lot and was in a perfect location. After months on the market, without an additional price reduction, over half a dozen serious buyers suddenly appeared. People were nonchalant when I told stressed that the home had recently seen a sudden surge of interest. Many even “pooh-poohed” the idea and mildly accused me of trying to get them of trying to coerce an offer. When the first offer came in, the seller wasted no time in accepting and I had several parties, buyers and agents alike, shocked, and more than a little miffed, that it was suddenly sold!

If the sleeper phenomena had happened only one time this past year, I would consider it a fluke but I have experienced this situation on homes in Chisago and Anoka Counties as well. In some cases I was the listing agent and others I was representing buyers.

So homebuyers heed my warning, if you are on the fence watching a sleeper, now might be the perfect time to make your move...Or someone else might beat you to it!
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