House Hunting Tips for Todays Crazy Real Estate Market!
No fooling this is the current market. Many Sellers are getting offers for full price, a growing number are receiving higher than listed offers, and homes are disappearing fast. In fact, average days on market are down 22.4% from last year. House hunters must be prepared. The first thing they need to do is to get a Pre-approval letter from their lender. In today’s market, the Buyer must be ready to pounce on the home they desire. When viewing the home, the house hunter must remember even if you think you toured the home first, chances are, you are wrong. When walking through a nice home, be assured, an offer is already in the works. The Buyer must be ready to pull the trigger and not have to wait around for a Pre-approval letter. The Buyer must also be aware of his obligations concerning escrow money and option period money. Escrow money guarantees the Buyer will show up to closing and usually runs $1,000 per $100,000 of offered price. The option money gives the Buyer a seven to ten-day option period, granting the Buyer freedom to bow out of the contract for any reason what so ever. After the option period then only a problem obtaining the loan or an act of God will allow you to opt out of the contract and obtain your escrow money. If you truly want to buy a home, be equipped for the hunt.
Prepare for multiple offer situations. What I mean is to be mentally ready for the possibility of missing the offer. Unfortunately, this is the market; you cannot get depressed or get in the dumps because you lost that perfect abode. It only means the hunt will last longer but do not despair, the right home is out there for you. This is also not the time to think you will be able to negotiate for a lower price. Negotiations are out the window. Think at the very best you could receive is list price. More than likely, you must offer above list price if you want to beat out the competition, especially for a very nice home. If you are searching for a home with the maximum price of $200,000 than look at homes in the $180,000 to $185,000 range to give you cushion to make an offer better than list price.
How much more must you go over list price? That is a loaded question. The Seller’s Realtor in the state of Texas cannot disclose the price of the highest offer to a Buyer’s Realtor. The only answer you will receive from the Seller’s Realtor “Is that your best offer?” What is a house hunter supposed to do? The sky is the limit to what you could offer however, it all depends on how you plan to purchase the home. If you are paying with cash no problem. If you are financing then you could have a problem with submitting high offers. With conventional loans, the Buyer must at a minimum place 5% down on the home. Those seeking a FHA loan are required to put a minimum of 3% down while those obtaining a VA loan are sometimes not required to place any money down for a down payment. If you find a home and are aggressive with the offer, you risk pushing the price higher than appraised value. The bank will take the appraisal plus the Buyer’s down payment. Add those two prices together and if the Buyer’s offer is higher than the final appraised price than the house hunter is in trouble. They will need either to cough up the additional funds or renegotiate with the Seller to accept a lower price for the home to meet the loan amount the bank will approve.
Homes are available, yet it is not as easy as it was only a year ago. Folks are hanging on to their homes as others are moving in to the area. Your Realtor must be persistent and knowledgeable with the market and north Texas neighborhoods. Purchasing a home in this market is a blood sport, be prepared! If you want more info, please do not hesitate to contact me at firstname.lastname@example.org or visit my website at http://www.djlyons-realtor.com .