(NEXSTAR) – Due to record low inventories, homes in almost every region of the country make a lot of money. Good news for sellers, but not so much for buyers.
“In 99% of all MSAs (Metropolitan Statistical Areas) … unprecedented,” said Dr. Jessica Lautz, Vice President of Demographics and Behavioral Insights. National Association of Realtors (NAR), mentioned the demand for available real estate. “It’s not just your top tech city anymore, it’s really everywhere.”
Competition is fierce when inventory is low. It’s not uncommon for a home to get multiple offers at a price above the asking price and sign a contract right away.
So what does the buyer do? Experts demand patience above all else. “A lot of offers can be needed before a buyer accepts an offer and signs a contract,” Lautz says.
That said, there are three major steps that buyers can take to give them an edge, all of which begin before their dream home is on the market.
Must be pre-approved.
Are you already working with a real estate agent? Is there pre-approval of the loan? Do you know exactly what features your new home needs? If so, have you looked at comparable homes (in your desired neighborhood) to see what they are for sale? If not, you may be prepared for a failure.
“When competing with others for scarce resources like homes, it’s not always the battle for who has the most money. It’s this person who has the highest risk of failure. “” Said John Manning, owner and managing broker of. Re / Max On Market In Seattle.
To minimize risk, Manning advises buyers to seek pre-approval from a mortgage bank. “A good lender will make sure the file is complete and perform the worst-case scenario or if interest rates rise by a quarter percentage point,” says Manning.
That way, when the right home arrives, the buyer can confidently present himself as a qualified candidate.
“Over the years, we can find out who is doing our homework,” says Manning.
You need to understand the market.
“In high-demand markets, we encourage buyers to start searching sooner than they think.” Coldwell Banker Realty In Cincinnati. “It’s a very competitive environment and we need to act quickly. How many in advance to educate ourselves in the market and act confidently and swiftly when we find one” It is advisable to check that house.
According to a recent survey conducted by the National Association of Realtors, buyers are working with real estate agents to navigate the market (88% as of November 2020, 69% in 2001). However, you cannot select only agents. The expert agrees that you need to be someone with a deep knowledge of your desired field.
“Work with experienced professionals. Someone who can negotiate a solid market and make sure your market is taken into account,” says Lautz. “They may also help you find areas you might have overlooked, perhaps pointing out rough diamonds.”
Some may go one step further to make sure their clients haven’t missed their potential dream home.
“We have to find a creative solution for our buyers,” he says. Diana MatitinAgent of Coldwell Banker Realty in Arlington Heights, Illinois. “I’m looking for an off-market opportunity. You knock on the door, ask people if they’re interested in selling, and write to the homeowner trying to find that dream home for the buyer. You will find it to send. “
I need to know when to retreat..
A deep understanding of the market also helps to understand the prices that buyers should and should not pay for their dream home.
“Many people know what they can afford to buy, but they don’t necessarily know the value of what they are trying to buy,” says Manning.
For example, during a bidding war, a buyer may make an offer that exceeds the asking price and, in some cases, try to remove the risk from the seller by abandoning the inspection.
But “in multiple offer situations, you don’t necessarily have to pay extra to win. Sometimes you need to find out what’s important to the seller and meet those conditions,” says Matichyn. .. “One of the things you shouldn’t do [is] Forget the contingencies of home inspection! “
However, in some cases it may be appropriate to consider offering an offer that is higher than the asking price, or in the best interests of the buyer.
“It depends specifically on the house and its neighborhood,” says Lautz. “In some cases, the price of a home may actually be set to be lower. [comparable homes] Sold within the last few months. “
Those who are willing to submit offers that exceed the asking price should also consider how they plan to use the home. Is it investment real estate or flip? Or is it a long-term home? In the latter case, especially if interest rates remain low, the extra money in the mortgage process may not be as important.
“If this were your main home, you could be pretty sure that you wouldn’t lose much money in 20 years,” Manning says.
However, whether or not to make a high-priced offer is a “very personal choice,” Manning said. According to him, the most important thing is to know when to stop bidding.
“Don’t get auction fever,” he says. “The goal is not to win the house at any cost. The goal is to win on your terms.”
In the seller’s market, experts urge buyers to do these three things before making an offer
Source link In the seller’s market, experts urge buyers to do these three things before making an offer