The Beginners Guide to Home Buying
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Finding Your "Dream Home" in a Crazy Hot Market
When the seller's market is running hot there are significantly more buyers for the same property. This can easily lead to multiple offers and the dreaded "over asking" with offers sometimes running into the double digits and conceivably tens of thousands to hundreds of thousands over the listed asking price. One of our recent clients was in a 30 offers over asking bidding war!
The market may be hot because of a dip in the mortgage interest rate (On August 9, 2019, according to Bankrate’s latest survey of the nation’s largest mortgage lenders, the benchmark 30-year fixed mortgage rate is 3.88 percent with an APR of 4.01 percent), as is one of the current factors. Other influences are of course a general lack of houses on the market and more recently a lack of remodeled homes on the market as buyers are ever more increasingly demanding turn-key, renovated and pre-beautified homes.
So what can you do to better position yourself as a buyer right now?
If you don't have all the money in the world to enter the fray of multiples while taking the time and facing the disappointments of losing your desired home, what are your best options?
1 - Stay on top of your chosen neighborhood and work closely with your agent to make certain that any property coming on is reviewed and considered by you immediately. This means you need an agent dedicated to your needs and working hard on your timeline so make certain that you find that person who is willing to take on the work which can be considerable. Your agent can target homes down to a single block or a specific area surrounding your job for instance and arrange to get notices to you immediately as the home is posted to the MLS (multiple listing service). The best agents are also in the market previewing homes at broker opens or arranging private showings with the listing agent.
2 - Consider looking at the less than refreshed. As buyers increasingly are willing to outbid each other for a well-presented home staged to it's idealized perfection; other homes that have real-world family life obviously on display and no updates are sitting; sometimes for months. These homes often represent great value and the lack of eager buyers will allow a savvy buyer to get them at a price that makes the necessary updating a viable alternative. Often buyers are rushing to find the home and feel that the time it takes to remodel a home to their tastes is too much or the effort is too costly but many flips have simply replaced flooring, painted cabinets, added new hardware, installed new plumbing fixtures, solid surface countertops, and painted in and out. Without major construction or alterations these jobs can be scheduled and executed in a few weeks timeframe and at a cost in the several thousands. Compare that to the 100,000 -300,000 bump that same house would list at similarly updated and then staged to perfection.
3 - Consider the financial upside. When you but a home that is undervalued by the marketplace and add the right upgrades you can reap the rewards financially when it is time to sell or even utilize the home as an investment property. Many smart buyers are living in and flipping homes as a means of growing their wealth.
If you feel like you need help in finding contractors or even working on the design aspects your agent can put you in touch with a virtual Rolodex of vetted and professional contractors. So don't overlook that less than pristine home, ready and waiting for your personal touch to blossom into your actual dream home.
Are you in the market with questions on how to proceed reach out anytime!
Always consult your agent, broker and tax or financial advisors to decide on your best options when negotiating contracts. Contact us anytime for assistance!
