Putting a home up for sale in one of Boston’s tonier suburbs this spring?
On the morning of your first open house, don’t be surprised if a venture capitalist, a world-class surgeon, and a host of other Hub honchos are camping out in tents on your front lawn. They’ll want your home. Desperately. And you’ll let them have it — one of them. But not before you see them sweat.
Take Pam Walker’s experience. A few months ago, the Syracuse University researcher put her late mother’s house in Concord on the market for $699,000 on a Thursday. She held an open house the following weekend. That Monday, she received 13 bids from supplicant buyers who stooped to what could be considered emotional extortion to land the house of their dreams.
“People wrote letters,” said Walker, 58, who grew up in Concord. “Many of the letters were very compelling. They were families with young children who wanted to live in Concord. I wanted to sell the house to many of them.”
Opening the bids quickly steeled Walker against their pleas.
The highest bid was $790,000 from a couple who visited the four-bedroom 1950s-era ranch three times over the weekend. But that couple needed a mortgage. Walker didn’t want to wait. So she accepted the next-best bid: a cash offer of $770,000 from former Concord residents moving back from Atlanta. The deal closed a few weeks later.
“I didn’t expect it to go so quickly,” said Walker. “Coming from Syracuse, many houses, even if they go quickly, still have the sign out for two to three months.”
No, Boston isn’t Syracuse. But even a few years ago, hardly anybody anticipated the intensity of the feeding frenzy for homes that recently has been sweeping through well-to-do towns, suburbs like Concord, Duxbury, Marblehead, and Wellesley.
The hot market is a reflection of how the upper echelons of Boston’s economy have rebounded from the nationwide recession with a vengeance, said realtors. Young professionals who have been holding off from buying their first homes are entering the market in droves while mortgage rates are still relatively low. Homeowners, meanwhile, are feeling financially stable enough to pursue their dreams of moving up the property ladder.
The result is an auction-like atmosphere that’s putting sellers in the catbird seat.
“There’s just a massive amount of demand for homes,” said Judy Moses, owner of Pathway Home Realty Group in Newton. “Whether it’s a first-time buyer or a move-up buyer, there is more than one offer on each property.”
Buyers are bending over backward to secure the homes of their dreams, said Kim Piculell, the William Raveis realtor in Concord who represented Walker.
The family that purchased Walker’s Chestnut Street property waived their home inspection contingency, for example, meaning they bought the house “as is.” Usually, that’s a really risky move. They plan, however, to spend about $300,000 renovating the house, Piculell, said. So a house initially priced at $699,000 yielded a total of $1.07 million in investment.
The best part for the seller? Walker spent relatively little money to improve the property’s appeal.
“The house had been well taken care of, but it was also well worn by my mom’s cats,” said Walker, who shelled out $20,000 to spruce up the house, including new carpeting and refinishing the hardwood floors. “I think that $20,000 got me $100,000.”
If there’s a downside, said Moses, it’s that desirable towns are becoming even more exclusive. “It’s difficult because it’s disappointing for home buyers,” she said. “For every offer that is accepted, there are so many buyers who miss out. For every happy person, there are heartbroken people.”
Asked how sellers should capitalize on the current hot market, numerous realtors said determining the asking pricing is far and away the most important decision.
Buyers are scanning listings like hawks, checking school rankings, reading real estate news, and educating themselves in ways that befit the over-ambitious power elite, especially now during the early spring, which remains the most active time of year for sales. They’ll look askance at anybody trying to take advantage of them.
Sellers, therefore, must get cagey, realtors said. They need to price their homes in the same ballpark as similar local properties in order to draw buyers who have already envisioned their ideal house — and price tag — in their mind’s eye. Invariably, realtors added, properly priced houses will go for higher amounts as buyers vie with one another to land their dream home.
“You can’t underprice a house in this market,” said Elaine Bannigan, owner of Pinnacle Residential Properties in Wellesley. “The market will correct it. But you still can overprice. Make no mistake.”
Another key maneuver to trigger a bidding war is to set a deadline for offers and signal you won’t be negotiating, realtors said. That forces folks to submit their final, best quotes on the spot. (This is when you see them sweat.) Sellers can then sit back with a glass of champagne and assess each offer based on price as well as contingencies — or the absence of them.
In this hot market, buyers are increasingly waiving home inspection contingencies, as was Walker’s experience in Concord. Sellers are also rejecting offers with home-sale contingencies, meaning they’re not accepting bids that entail waiting for buyers to sell their current home. They’re even bypassing bids with mortgage-approval contingencies.
As always, cash is king.
But don’t get cocky. Staging and curb appeal are as important as ever, especially for younger buyers easily turned off by fusty old furniture, minor imperfections that can suggest serious underlying problems, and other distractions that keep them from imagining a house as their would-be home, realtors said.
When selling Walker’s house, Piculell emptied it of furniture and hired a graphic designer to create a book of new floor plans that showed what the house might look like if a buyer tore down walls and made other renovations. She’s also used three-dimensional interactive computer simulations to re-imagine other properties.
“It really gets buyers who don’t necessarily have the vision to look and say, ‘Oh, yeah, look what would happen if we took down that wall,’ ” said Piculell.
Around 2.5 miles from Walker’s former family home, another one of Piculell’s clients, Bob Eaton, was heeding her advice.
He has been clearing overgrown thickets around his late father’s house in Concord in anticipation of putting the 1940s-era Cape up for sale for $1.89 million in early May. The thickets obstruct the view of a pond on conservation land down the hill from the four-bedroom, three-bath house.
Eaton understands that, given the current seller’s market, the property would probably sell itself, but he wasn’t taking chances. The pond, nestled in woods once owned by Ralph Waldo Emerson’s family, was a key selling point he didn’t want anyone with deep pockets to miss.
“The view really is spectacular,” said Eaton, 58, a lawyer who lives in Rye, N.H. “People need to see it. We’re trying to show them what the vision is, what the potential could be so they can turn it into their dream.”John Dyer can be reached at email@example.com.