Last weekend I went hunting. No, not for me. I marked along with my daughter and her fiancé who are moving from Texas to Colorado after she graduates from veterinary school (insert hats and skirts here) next month.
Even for this experienced home hunter this experience was humiliating. In more than three decades of staying in and out of the housing market, I’ve never seen so many overpriced, obscene homes sold at a price above the asking price for the time it will take you to say new paint.
Last weekend we toured 12 homes. By the end of the weekend, all had their contracts gone, including the one to which the children had made an offer and had not received it.
Here I need to pause to take a deep breath of fragrant salts. For one house they liked, the one that actually made their hearts beat a little faster, they made an offer for $ 15,000 over the asking price. (They both sold their homes.) One would think this would grab the seller’s attention. But no. The sales agent sent our agent a text that literally said the offer was “not appealing”.
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Not appealing? What kind of world is this?
She was expecting higher deals with longer rental returns. (The children need to move to my daughter’s job on June 1. The seller wants to live in the house for free for five months after it closes.) The house was sold for $ 100,000 on request. You think I’m kidding. I would like to be.
“Not even a counter-offer?” I asked our agent incredulously. No. Not in today’s market. Sellers get a dozen offers and choose the one they like best.
And so it is in the difficult world of buying a home. You set off with a wish list and keep lowering the bar. In this case, children want to have a decent kitchen with a bar stool, less than 20 minutes drive to the veterinary clinic, where my daughter will work and may need to quickly mature in the snow, a fenced yard for their two dogs, a garage large enough for its truck, little appeal, little charm, pedestrian neighborhood. And while they’re willing to make some improvements, they don’t want to add home renovations in addition to two new jobs and a new marriage in a new state.
However, when we toured the houses for sale, all came to mind a word I hate: settle. Well, if we replace the old lamps, worn carpet and laminate shelves around 1970, then perhaps we might not notice the fact that the house goes to the interstate, and the basement smells of wet dirt and has a natural light level conducive to mushroom growing and keeping a colony of bats.
If you are looking for a new home and the Lord will help you, here are some drastic tips from experienced real estate agents to help buyers dominate the sellers market.
• Don’t expect a deal. Don’t expect you to buy a house well below the asking price or that the buyer will lower the price to make the necessary repairs.
• Make the best offer first. Ironically, you may not get the opportunity to negotiate. Stories of numerous offers within 24 hours of the house being listed are real and happening across the country.
• Come with proof of funding. If you can swing all the money, do it. The next best thing is to bring as much money to the table as possible. If you are financing the purchase, receive a letter of prior approval from the mortgage lender who has confirmed your finances and credit.
• Buy homes just below your budget. This will not only give you the opportunity to offer more, but will also leave some funds for improvements that you will probably need to make.
• Recruit a great agent. At no other stage of your life will you probably spend more money in less time than when buying a home. If you are making such an important investment, you want to work with someone who is well versed in the areas you are looking for, has good relationships with other agents, gets advice on homes that will soon be on the market, is creative negotiator and can act quickly on your behalf.
• Become yourself. Keep your balance when making offers and negotiating to avoid a failed financial decision due to despair and emotion.
• Remove unforeseen circumstances. The more contingencies buyers incorporate into their offerings, the more likely sellers are to reject them. The next big hurdles appear after getting funding, going through a housing review and getting an appraisal. Although home inspection is important to buyers, in some markets buyers are willing to tell sellers that they will give up all but the most significant issues. Because appraisal prices usually lag behind market prices when homes are sold at historical highs, some homes will not appraise the sale price, which means the loan may not pass. If buyers can show that they have the cash to close the gap between the valuation and the contract price, that’s a plus.
• Offer more than money. Learn what other than price matters to sellers. Perhaps they want a quick closure, or a flexible relocation date, or a leaseback period. Some nostalgic sellers prefer buyers who promise to appreciate their homes as much as they have, whether for its historic architectural heritage or for its avocado and tire garden. Buyers who let sellers know they share the owner’s love for the home can come forward.
Marnie Jameson is the author of six books on home and lifestyle.