July 12, 2021

This paid piece is sponsored by Amy Stockberger Real Estate.

By Amy Stockberger

Do you want to sell your home to cash in on the historically high sales prices and enjoy the wildly low interest rates on your next purchase but can’t find that next home? More options exist than ever before in our market.

Local brokers of the Realtor Association of the Sioux Empire collaborated on ways to help increase inventory for not only the homeowners who want to make that next move but also for the new buyers entering our market. No spoiler alert needed — we need more inventory on the market.

While options have always been available for the type of ideas RASE brokers worked on in the past few months, when an industry collaborates together to help consumers meet their goals, then we are truly doing what we were called to do: Serve the client at the highest level.

Low inventory creates low inventory. The homeowners who have the homes we need on the market are not putting their homes on the market because they can’t find their next match. What would happen if those sellers would put their homes on the market, contingent upon finding their next home?

Inventory would rise, and organically we would make a lot of matches. This could be a nice risk-free way for sellers to get the price they want for their home and give them more inventory options for their next property.

While everything is always negotiable in real estate — for instance, we just had a dog negotiated in personal property on a home — the basic idea of a home replacement contingency is that a seller puts a home on the market contingent upon that seller finding a replacement home within a specified time frame that both buyer and seller have agreed upon. Some buyers may be willing to give that seller as much time as they want; some may require a shorter time frame. Either way, if that replacement home isn’t found, the seller does not have to move forward with the transaction.

We came up with another option for sellers. If expertly negotiated, you can sell your home for the desired price and then lease it back from the buyer. This provides a win for both parties where buyers can get the home they want at these great interest rates and the seller can stay in the home for the time frame they need.

The complexities of buying and selling a home are great, and consumers truly need an experienced advocate for them that has the negotiating skills and market knowledge to navigate their goals for them.

While I have no problem using an online attorney software to open an LLC for me for $250, I would never entrust them to navigate a $250,000 transaction for me. The same holds true with real estate: You need a local, full-service broker to get you the best possible outcome.

RASE’s June statistics showed an average sales price increase in the Sioux Falls area of 14.6 percent at close to $295,000. Many are wondering if they are overpaying in today’s market. I personally feel with the growth pattern that we are seeing in our beautiful city, thanks to our talented leaders and prime tax savings here, that the prices won’t be going down anytime soon. So what is the cost of waiting out the market?

At a request of one of our agents, Ryan Spellerberg at First Premier Bank did some calculations for us. Here’s what he determined:

“Let’s say your buyer waits until 2022 to buy and prices come down $15,000 on average for a home, but rates go up hypothetically by 1 percent with inflation;

Here are the numbers:

$265,000 financed at 2.75 percent — Total cost of the loan $389,458.

$250,000 financed at 3.75 percent — Total cost of the loan $416,800 — $27,342 cost of waiting.

As I think Ryan confirmed, I don’t feel waiting is the answer. Rates will go up; history has shown us that is the trajectory.

And parents, did you know that South Dakota Housing has made it even easier for first-time homebuyers to get into a home to start building wealth through real estate? The agency has a new down payment assistance program, coupled with closing costs bundled in, allowing buyers to buy a home with as little as $250.

What an amazing time for your kids to buy their first home in a city that is growing by leaps and bounds, allowing for maximum appreciation and wealth building.

For details about the ways to sell and find your next home or get that kiddo out of your basement and into their first home, please reach out.

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