“The last two sales I’ve gotten, happened because I was thinking outside the box to make the buyers’ offers more enticing.””

Sarah Principe

Every real estate market presents opportunities. The challenge is finding them.

Today’s market, especially in the East Bay of Rhode Island and Southcoast of Massachusetts, is much the same as it has been for the past three to four years. There are too few houses on the market, creating a vast imbalance between low supply and high demand. As everyone remembers from Economics 101, low supply and high demand tend to drive up prices. In a region like this, which remains highly desirable with excellent quality of life, price spikes are even more pronounced.

Statewide, Rhode Island median sales prices have risen 5% to 20% annually. Yet in Bristol, for example, the median sale price of a single-family home has risen 48%, to $685,000, in just a year. Not long ago, the price for a starter home might have been $300,000 to $350,000. Now that conversation starts at $500,000 and rises quickly from there.

Despite the powerful market forces at work here, there remain opportunities for both buyers and sellers, with more stress for the former and more strategy for the latter.

Buyers, be crafty

Sarah Principe, a Realtor with William Raveis, works with many buyers, some of whom have simply given up on the East Bay. “I’ve had a lot of buyers who have crossed lines and gone into Massachusetts,” she said. “They find they can get more bang for their buck. They can get more land and a bigger house than they can afford in the East Bay.”

However, for those who are determined to make it work in this region, she has advice. “If you want to stay in the East Bay, you have to get really crafty with how you present an offer,” Principe said.

Cash is king, but most buyers don’t have piles of cash to throw at their next home. Principe said there are ways to complete other than cash.

“You have to be creative with the three areas of your offer — purchase price, inspection contingency and mortgage contingency,” Principe said.

She never advises clients to waive their home inspection, but there are ways to be more flexible in this area. “For example, you can say, ‘the buyer will negotiate with the seller only if an item is estimated to cost more than $10,000 to repair or replace,’ ” Principe said. That way buyers give the sellers assurances that small problems won’t sink the deal, while still protecting themselves against major problems or discoveries.

Buyers can also purchase home warranties, giving sellers confidence that they are willing to accept the risk while still protecting themselves.

On the financial side, buyers can be crafty with their offer by including something like an appraisal differential. It’s like an escalator clause, where the buyers agree to come forward with more money if the mortgage appraisal does not meet the asking price. “You say, ‘we’re willing to cover the differential.’ That can get you far with a seller,” Principe said.

“This is why everybody needs to be represented by a buyers’ agent, especially in this market,” Principe said. She believes an experienced real estate agent is invaluable at a time like this.

“The last two sales I’ve gotten, happened because I was thinking outside the box to make the buyers’ offers more enticing.”

Sellers, be prepared

Though everything about the market is tilted in their favor, sellers have work to do, too. If they are willing to move, and finally cash in on the enormous equity in their home, they still face the same challenges as every other buyer in the market — finding a new place to live.

Assuming they have properly prepared their house for market, it will sell quickly. Most agents today advise their clients to do their own pre-inspections. Depending on what the inspections reveal, many owners will address minor improvements, repairs and problems before listing the house. If all those issues are addressed before the “For Sale” sign hits the lawn, then the only real factors for buyers to consider are location and price.

So, knowing that your house will sell very quickly, probably in two weeks or less, don’t list your house until you have somewhere to go, says Principe.

“Most experienced listing agents will advise their clients to not list their house until they have someplace to go,” Principe said. “I even tell them to identify a house to purchase first, to go under contact, to go through the inspections, and to even do the appraisal, before listing. Then they can put their house on the market.”

When they do, in this market, in this region, they can have tremendous confidence that their home will sell, and it will likely sell in a flash. The buyers are lined up and waiting.