News
from the home-buying front tells of a host of shoppers converging on
just-listed homes, engaging in bidding wars that rival a Sotheby's
auction. It's enough to intimidate even the most experienced
homebuyer.
In
some parts of the country homes are selling within a few days and,
on various occasions, at or above the asking price. Since the onset
of this sellers' market, shoppers have been engaging in bidding wars
only to hear that their dream house was sold out from under them.
Beyond-belief prices, limited choices, and white knuckle decision
making leave these veteran shoppers discouraged. Incredibly,
homebuyers may fight the good fight three or four times before going
to contract.
What
can you do to up your odds of getting to the table? Purchasing a
home in a sellers' market calls for a blend of traditional and
unconventional strategies:
Work
with a real estate professional. Don't think you can go it alone in this intense
market. Following the expert advice and guidance of a professional
may get you the house you want. For instance, your real estate
professional should be able to explain the implications of the list
price to sales price ratio and the length of time the property has
been marketed.
Sell
first. If
you need to sell your home to buy another, consider selling first.
Many sellers have plenty of buyers from whom to choose and may not
consider a home sale contingency. If you set your closing date a few
months out, you should have time to find a new home after yours has
sold.
Be
prepared to buy on the spot. The pressure will be on to make an offer on your
very first visit. But, even if you do, it doesn't guarantee that the
owner won't consider other offers. To increase your chances of
getting the nod, and outbidding other buyers, house hunt with
pre-approved financing. Some homebuyers don't bother to go beyond
getting pre-qualified. But pre-qualified is only the lender's
opinion whereas pre-approved is a commitment by the lender subject
to an appraisal of the home. Owners may prefer dealing with
pre-approved buyers to dealing with those who come in with higher
bids but run the risk of not qualifying for a mortgage.
If
the home is priced well and the seller has multiple offers, a buyer
may resort to making an offer over list price. In a fast market, it
could be the deciding factor.
Be
flexible. By letting the owner choose the closing and move-out dates, you'll
rate high on the easy-to-work-with index. The fewer contingencies
you have, the more inclined the owner might be to sell you the
house. Remember, when competition is tough, an owner can easily pass
you by for someone less demanding. You may consider including
substantial earnest money with your offer as a sign of strength.
Make
a personal inspection. Although this list is not complete, you'll want to include the
following in a personal inspection of the entire property prior to
making an offer: Check the foundation for cracks. Does the house
show any obvious water damage? Examine ceilings, window areas, and
basement walls. Look for damaged plaster and wallpaper. Do you
detect mold or dampness anywhere? In the attic, dark water stains
and holes with light escaping may be evidence of deteriorating
flashing, the leading cause of leaks. Check the major
systems—electrical, plumbing and heating. Do you notice anything
unusual? Is the heating/AC satisfactory? Look at the appliances.
Consider their age and condition. In general, does the house seem
well built and energy efficient? Using binoculars, inspect the roof.
Depending on the type of material (asphalt, wood, etc.), look for
missing, cracked, curled or discolored shingles or tiles, an uneven
roof line and holes. Does the house need to be painted, inside or
outside? Does water drain away from it? Are any trees threatening
its foundation or roof? Is the exterior in good condition? Look for
broken shutters, torn screens, crumbling steps, etc. Include an
inspection of additional structures such as a garage or shed.
These
strategies may help you make a quick but good decision and increase
your chances of going to contract. You don't need to be another
casualty of the bidding wars.
If you have questions about this or any other
home buying or selling subject, confer with the real estate
professionals who can help provide you with more detail…
We
can be reached at (310) 265-2130
Prudential California Realty is an independently owned and operated
member
|of The Prudential Real Estate Affiliates, Inc., a Prudential
Financial company.
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Opportunity
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