The New Strategy for Today’s Buyers!
The market is wild and crazy. Homes are selling like proverbial “hot cakes”, frustrating Buyers and their Realtors alike. What must a Buyer do to purchase a home? A year ago, it seemed as though you might not be able give one away, yet now multiple offers are the norm. Why is this? In North Texas, we are experiencing the perfect storm. Home prices are inching upward however mortgage rates remain at historic lows. FHA loans scheduled to become more expensive due to increased MIP (Mortgage Insurance Premium) driving first time Buyers to the market, coupled with the expectations of rising interest rates Buyers are out in droves. Sellers on the other hand are holding on to their homes. They watch as prices go up and are waiting to sell at the most advantages moment. This, in a nutshell, is driving the current Real Estate frenzy.
Today’s Buyer must employ new strategies to compete for a home on the current market. The Confederate General Nathan Bedford Forrest used to frustrate the Union with his brilliant maneuvers and tactics. After the war, someone asked how he accomplished such stunning victories, he replied “To git thar fust with the most men.” For the Buyer this strategy could not be truer with only replacing the word ‘men’ with ‘money’, “To git thar the furst with the most money”. The Buyer must keep his eye on the market for listings freshly released. It is common to witness homes snatched up the first day on the market. Have your Realtor set you up on the MLS to receive an email as soon as a home lists and if the abode is desirable, immediately schedule a showing. If you think the home may be the right one, have your Realtor write an offer before the showing so if the home is indeed the one to buy, an offer can be signed on the spot and sent off to the Seller’s Realtor. Time is of the essence.
The days of negotiating $10,000 off the price are gone…at least for now. Expect to pay full price with some cases over full price. However, be aware especially for FHA Buyers that going too high can result in a low appraisal. If that is the case then the contract can be renegotiated or broken. You can try to negotiate closing costs still it would be a dicey situation, especially if other offers come in. Remember if you love the home, there are three or four others who think the same way. Use your option period. In some circumstances if you are leaning towards a purchase but are not completely sure then make an offer. When accepted than you can determine if you really want the home and if not terminate the contract during the option period. You will lose your option money, usually $100 however consider the option money a placeholder. The $100 is worth feeling good about the deal without fear of losing the home to another Buyer. Do not get me wrong. I love to fight for the best price possible. Unfortunately, in this market the best price is on the high side. We are in a Seller’s market. See ya down the road. http://www.djlyons-realtor.com