The State of Real Estate | Hot Seller’s Market in Lynchburg Region Continues in 2022
The Hill City region is an attractive place to live, with options ranging from quaint older homes to new construction, in bustling city areas, quiet suburbs and rural farmlands. According to Lynchburg’s Office of Economic Development and Tourism, the city is one of the fastest-growing in Virginia and tops list after list for best places to live in the country. The expansion of Liberty University and Centra Health, two of its top employers, as well as short commutes, reasonable cost of living and a temperate climate, have spurred its growth.
While the Lynchburg area was already bustling with potential, the pandemic, which many real estate agents feared would bring the market to a grinding halt, did the opposite.
“We were surprised that not only did the market not shut down, it kicked into high gear,” says Kathy Terrell, a Realtor with John Stewart Walker. Terrell notes that while people were on lockdown, they had more time to browse online listings, and with children learning at home and parents working remotely, homeowners and renters alike noticed what didn’t work for them about their current spaces. Additionally, as the work-from-home culture takes hold, some workers can live wherever they’d like, be it Los Angeles, Lexington or Lynchburg, and this has brought more potential buyers from outside the region.
Terrell says January 2022 was the busiest January she’s had in 35 years of selling real estate. Typically, the winter slows to a crawl, as potential sellers get ready for the spring market, but this market hasn’t cooled since it heated up in 2020.
So what does a seller’s market really mean, and how do you prepare to buy or sell a home in this climate? We talked with Terrell and two other leading local agents to get the inside track on how to succeed in 2022, whether buying or selling.
Sellers command top dollar
How do we know it’s a seller’s market? Simply put, it’s when demand exceeds supply, and that has intensified in the past two years. Nadine Blakely, a Re/Max agent with more than 16 years of experience, remembers a time when there would be 1,200 homes on the market for buyers to choose from, and in January, for example, the Lynchburg region was averaging approximately 280 homes on the market.
“The average selling price of a home in this area in 2020 was $227,000, and in 2021 it was $254,000,” explains Blakely. The average days on the market decreased from 47 days in 2020, to 26 days in 2021. Homes are selling for more money, in less time, and potential buyers are often in competing situations, sometimes with as many as 15 or 20 offers. While this is disheartening for buyers, it’s great news for sellers, particularly those who are looking to downsize, and those who can rent after selling a property, while waiting out the market. Their homes have never been worth more, and a well-priced home will sell quickly. But despite this strong seller’s market, there are some pitfalls to avoid if you are planning to sell, say our real estate experts.
Prepare your home to sell
It’s tempting to assume that, given the seller’s market, homeowners can plant a sign in the yard and sell their home with little to no work. But to receive top dollar on what is likely your most valuable asset, you have to prepare well.
“If you want to get top dollar for your home and you want it to sell quickly, and you want a bidding war, you need to take the time to get your house in the best possible condition that you can,” says Terrell.
On the inside, if paint is nicked and tired, repaint. Walls should be pleasing neutral shades, and don’t ignore trim, as newly painted trim can make a house appear fresh. If you are unsure about what shades to choose, ask your Realtor; they often have a file of favorite colors, and can recommend painting contractors. Clean or replace worn carpet, and while you don’t have to hide every family picture, you should declutter where appropriate, such as a table filled with multiple frames, or a refrigerator door filled with magnets holding special photos and mementos.
Blakely says a potential buyer’s impression of your home starts when they park the car, so be sure the first impression is a good one. “Curb appeal starts at the street. Everything from the mailbox to the front door to the roof should be in good condition,” she says. “Don’t have stains on the roof, or peeling paint on the front door. Landscaping should be tidy and no dead flowers or broken flower pots.”
Make sure your home is legally ready for market
Cosmetic updates are important, but Yvonne Jansen, a Century 21 agent in the Lynchburg region, says you should take it a step further for a quick and uncomplicated sale.
“The law has recently changed, and now septic systems have to be pumped within two years, and this has been a big issue, getting this done in a timely manner before settlement,” Jansen explains. The individual performing the work has to be a licensed technician, and given the demand, they can be difficult to schedule. So if you are preparing to sell, be sure your system has been pumped, the technician was licensed, and you have a receipt.
Jansen advises her clients to do a light home inspection and then make the repairs. “In this market many potential buyers are forgoing an inspection to make their offer competitive, but if you can show that you’ve already done an inspection and fixed the issues, it can be a negotiation tool,” she says.
Jansen also suggests pulling the property survey and deed. “Some of the properties here are large, and sometimes homeowners don’t realize that old cemeteries can be hidden by trees, or there are old wells, or fences, and sometimes a deed was never recorded properly,” she notes. Pulling a deed ahead of time and checking to be sure fences don’t infringe on neighboring properties, old wells aren’t uncovered, or a deed isn’t recorded with an incorrect name, for example, can avoid snags that hold up a settlement.
Terrell says that if a potential buyer is walking through the home and counting up things they’ll need to fix, they may get overwhelmed and just move on. She says poor odors, clutter and visible neglect will make a buyer wonder what else has been ignored that they can’t see, such as the HVAC and roof. Have these big-ticket items inspected, and be able to show a clean bill of health for your home. While these up-front investments cost time and money, our three experts assure that it is money well spent, and will return to the seller in the form of better offers.
Be an attractive buyer
While the market is undoubtedly skewed in the seller’s favor, potential buyers, take heart: There are ways to ensure your offer rises to the top of the heap. While in a buyer’s market, one has more ability to negotiate on price and terms, but that is not the market we are currently in right now. Our real estate experts note that buyers often have to lose out on a couple of properties before understanding that they have to act quickly, decisively, and make their first offer their best offer.
“In addition to talking to an agent, the other conversation a potential buyer needs to have is with a lender, because you must have a preapproval in hand and know realistically how much you can spend,” says Terrell. “Any good Realtor will ask if you are prequalified and for what amount.”
Cash buyers are often winning out in a bidding war, but if you are financing a loan, there are ways to ensure your financing is attractive. “When an offer comes in on a listing and it already has underwriter approval, beyond just an initial preapproval letter, that’s golden,” Jansen says. “It usually means that the buyer has lost out on another deal, but it’s extra insurance that the buyer is truly qualified.”
Working with a local bank rather than an online lender can bolster the seller’s confidence that the deal will indeed go through, and our agents advise that while online lenders draw in clients with lower interest rates, the fees can be higher, so be sure to do your homework and compare lender terms.
Forgoing inspections is common, as are full-price offers with escalation clauses, allowing an offer to incrementally rise to best another one. Contingent offers are less strong (offers that hinge upon selling another home first), as are rigid closing dates, or those that stretch too far in the future. A good agent can advise you how to make your offer stand above the crowd, and there are buyers who may be best waiting out this market and saving for a down payment while continuing to rent.
This market can be challenging, but these Realtors have given a useful roadmap for success as a potential buyer or seller. If you are ready to jump into the market and want to buy, talk with at least two lenders to find the best terms you can, and obtain prequalification. Interview agents to find someone who understands your goals, and who you feel comfortable working alongside. If you plan to sell, interview potential agents at your home, and have them present you with a market analysis, suggested price, and their plan for marketing your home. Assemble a list of questions to ask before you meet, such as, how many homes have you sold this year, and how can we get the most possible for our home? Choose the best professional you can for walking you through the process of selling what is likely your largest asset, and you’ll be on your way to a “sold” sign in your yard. ✦