Being a Successful Buyer in a Sellers Market
The best strategies to buying a home in a seller’s market
Home ownership is something many of us are working towards for a variety of reasons. First time home buyers may be adding members to their family, young professionals can grow tired of shared spaces with roommates, and seasoned investors may be seeking hard assets to expand their portfolio. Whatever the reason for making the decision to purchase a home or condo, obstacles may arise while operating in a hot seller’s market. As I had mentioned in last month’s newsletter, the process of putting an offer in on a home remains the same. Each individual agent may have their own style of submitting the offer, however, the most successful agents identifying areas of importance to the seller in order to highlight items that make buyers offer stand out. In the competitive market we find ourselves in today, some of these strategies can shift risk from the sellers to the buyers. We have been seeing more than ever, buyers willing to waive contingencies in order to gain an edge in a bidding war and get their offer accepted. The reason these tactics are so successful is because they come with very little risk to the seller. It’s a signal to them indicating the seriousness of your determination to make this transaction happen. So why don’t all offers waive their mortgage or home inspection contingency? Some buyers are not willing to risk an undiscovered leaky roof or the potential of a furloughed job during these uncertain times. These contingencies are in place to protect buyers from such discoveries and or events when making arguably the largest purchase of their life. So, buyers need to understand the risk and ask themselves how badly they want the property they are pursuing and what their certainty of execution is. Here is a list of some of the best practices when you have made the decision to put in an offer:
Have your pre-approval letter ready-
Being prepared is always the best approach in any situation. Big banks are not always the best answer when shopping rates. In many cases using a smaller more personable lender can speed up the process and have a greater rate of completing successful transactions.
Work with a responsive agent-
Working with an agent who consistently takes hours or days to reply is not the level of service you should expect. Timing and constant open communication puts you in the best position to face challenges during the offer process and well beyond.
Understand the risk-
Should you find yourself competing with other home buyers and decide to waive contingencies or include an escalation clause, it’s important that you understand what the potential impacts of those decisions can be later on in the process.
Review the homework-
An exceptional agent will have already provided as much information as possible about the property you are considering reflecting the known facts. Agents will not make decisions for you. We present the information, explain the risk and provide professional advice based upon our knowledge and experience. The keys take away here is to have a trusting relationship with your agent so the outcome leaves you with a feeling of accomplishment and home keys in your hand. As reported by the Boston Herald, 30 fixed mortgage rates rose to 3.01% last week from 2.98% the week before. It has been 50 years since we have seen sub 3% rates! If you missed buying or selling in the spring, this summer has been busier than ever. I’m happy to connect and discuss home values in your neighborhood, refinance options, or any questions or concerns you may have about the current real estate market. Contact me anytime to learn more about the services I can offer you. Next month I’ll speak directly to the sellers in the group and detail some ways you can get top dollar for your listings.