As a buyer you may be feeling panicked. A house shows up on-line, you are sure it is “the one”. You excitedly dial the number, you get a live voice, you ask if you can set up a showing and then you hear those very, very sad words: “Sorry that house has an accepted offer”. You may have already sold your home or your lease is soon to be up and you NEED a place to live.
This is the craziest market I have seen in my 12 years of real estate. Homes are getting multiple offers, sometimes in a matter of hours of going “live” on the market. According to my brokers, who have been in the business for 30 years, this may be the lowest amount of inventory they have ever seen.
What can you do as a buyer to navigate this current housing market?
- Get your pre-approval. You will need to know your pre-approval amount prior to making an offer. If you are putting an offer in on a home and you know there are other offers coming in it would be wise to submit the pre-approval with the offer.
- Don’t trust the on-line real estate sites. Zillow, Trulia, Realtor.com are liars. They don’t mean to, but they do. These websites will continue to show properties as active even though they have offers. They will show them as active/available until they close. Why? Because in our multiple listing service agents don’t mark their listings as “pending”. We mark them as “Active with Bump”(has an accepted offer but buyer has a home to sell) or “Active without Bump”(has an accepted offer and buyer DOES not have a home to sell). The labels we use do not translate to the labels the on-line sites use.
- Find one agent you trust and work exclusively with that agent. Why? Agents have the ability to see the new listings as soon as they come live on the multiple listing service. In fact, we can set you up to receive those new listings as well…even before Zillow knows about them. Most real estate offices also have a board of new listings. An agent who is working hard for you will be checking the board daily. I have even been known to knock on a few doors to see if people are interested in selling.
- Be prepared to pay full asking price or possibly even over list price. Many homes are getting multiple offers with-in hours of listing. I have written offers for buyers for $5000 over asking price, strong buyers with 40% down, and they did not get the home. If you want a “deal” on a house this may not be the right time for you to be attempting to purchase a home.
- Keep in mind every $1000 of offer price equals about $5 per month in your mortgage payment. For example the difference in your mortgage payment if you pay $100,000 for the home versus $105,000 is $25 per month. My advice to buyers when writing offers when multiple offers are coming in for the property is to decide what price you will offer that if you DON’T get the home you won’t be sad in the morning. You won’t be saying: “ if we had only offered $1000 more”.
- However don’t get into an auction mentality and overpay for a home. Make sure you have a highest and best amount in mind that you will pay for that home when you start the offer process. I always ask my buyers to think about re-sale. How long do you plan to own the home? If you pay top dollar for a home today and have to sell it in 2 years you may not re-coup your investment.
- You will have to list your home and most likely have an offer on it before you can write an offer on another home. I know that is a scary thought, what if there are no homes for you once you have an offer?? But with the amount of offers coming in on properties most sellers will not accept an offer contingent on the sale of your home. If you have an offer on your current home you are contingent on a successful closing. They are a few other creative ideas that I use when listing homes- call me and I would be happy to discuss them with you.
If you are thinking of selling there has not been a better market in years. If you are trying to buy…hang in there, you will find one.