So, you’re pre-approved and have started looking for a home, but as soon as you find something you want to look at it’s gone. Unless you have been living in total isolation in a deep dark cave where your only contact with the outside world is via carrier pigeon and smoke signals you are aware that the Real Estate market is scorching hot. The shortage of homes for sale and the abundance of buyers have created an environment where only the most aggressive and motivated individuals will take the prize. That said, here are 5 tips that will help you stay competitive in this ferocious market!
1. Accept the fact that the market is what it is.
This is crucial, there is no way around the fact that the market is a seller’s market and the homeowners have the luxury of being picky when it comes to buyers. If you are looking to buy in the current market with blinders on you will most likely be outbid every single time. This market, as in all markets, boils down to simple supply and demand. Having more buyers than products will always drive up the value of the product and spur a competitive environment. Preparing yourself for what you are walking into will lower your stress level and allow you to better navigate the current market. Being mentally and emotionally ready will position you to go toe to toe with the competition and get that house!
2. Be prepared to write an extremely strong offer.
Once you find the home you want it’s time to make your offer. You will most likely be going into a multiple offer situation, which means the seller has received numerous offers for his or her home. If this is the case, you must be prepared to write a strong competitive offer. This is not the time to lowball and try and get the deal that you will be able to brag to your friends and family about. If this is your goal, I would suggest going after homes that have been on the market for a while. The odds are higher that the seller is more open to negotiating. Another option is to wait for the market to shift back to a buyer’s market. If you are looking to buy now you must be ready, willing and able to offer at least asking or possibly even a bit over asking price. Which, in all honesty, will not guarantee you get the offer accepted but will at least give you a fighting chance. Your goal is to get the offer accepted. Once the seller has accepted your offer, the deal can run its course with the home inspection, appraisal, and whatever other items that have been included in your offer.
3. Work with a Realtor!
Working with an experienced real estate agent in a piping hot seller’s market will greatly increase the odds of your success. Realtors have the knowledge base to navigate through the market and handle all the legal aspects of buying a home. They have access to tools and systems that will keep you up to date as to what homes are currently on the market and let you know when a new listing becomes available. Furthermore, the information they have is current, in contrast to many of the third-party sites that are out there which are notorious for having outdated or wrong information. Many Realtors offer tools to their clients to aid them in the hunt for their home. For example, I use HomeScout which is an application that allows my buyer to search for homes on their own. This system gives them access to all the homes that I have access to including information regarding the surrounding area. Having a good Realtor by your side can give you a significant edge in accessing property information and in the negotiation of your deal. Oh, did I forget to mention, most of the homes for sale are listed through a real estate company. So, in order to even get in to see them, you have to use and licensed agent.
4. Be motivated to see homes.
Now that you’re working with a realtor and have access to all this great information it’s time to start viewing some homes. Obviously, you can’t just barge into any home with a for sale sign in front of it. Usually, a realtor needs to give a 12 to 24-hour notice to set up a showing unless the building is vacant. You need to be able to get into properties as soon as possible in this current market. It isn’t uncommon for a new listing to have multiple showings within the first couple of days of the home being listed. Your best tactic would be to let your Realtor know what days and times work best for you to view homes. This way your agent can be proactive and set up appointments as soon as they find something that they think may interest you. Also, you must be prepared to go out and view homes even when it may be less than convenient for you. This is a competitive market and for you to find your dream home you may have to turn your regular schedule upside down while house hunting.
5. Be ready to make a quick decision.
You have been running ragged with your Realtor looking at homes and now you found something you like. Time is of the essence! Now, before I go on, I am not suggesting you make a rash decision, you need to be sure that the home in question is the one for you. Balance the pros and cons, but be aware you do not have the luxury of time. As soon as you are sure that this is the home for you, you need to sit down with your agent and draft out an offer. I won’t get into much detail as to what documentation is used to make an offer as I will be addressing that in future blog posts. In short, there will be state-issued forms that must be filled out and delivered to the seller in order to begin the negotiation process. It’s a good idea to ask your Realtor early on to supply you with copies of the offer to purchase and whatever other documentation is needed. This way you can review them at your leisure. Better yet ask them to sit down with you and go over it. This will probably catch your Realtor off guard as it is common practice to go over the paperwork when the offer is being written. Nonetheless, they should be more than happy to go over this information with you as it will save valuable time. (Note: you should still go over the documents again when you are writing the offer.) Since you already have gone through the documentation you should be better able to understand what is going on. Lastly, I highly recommend using digital signatures, this will enable you to review documents via email and sign them right on your mobile device. Digital signature software will allow your agent to send documents to you as quickly as possible, this is extremely useful when time is of the essence.
In a market that has an excess of buyers and not enough homes, you must have up to date property information and, the ability to view homes quickly. Perhaps the most important thing is the willingness to write a strong offer. Working with an experienced Realtor will pretty much cover all your bases and give you a fighting chance in a seller’s market. Regardless of if you have a Realtor or not, your success boils down to your mindset. Accept the fact the market is what it is, chances are you will not find the rock bottom price you are looking for, but you can find a great home at a fair price.
By: Virgilio Maldonado