Buying a home this Spring can feel like a race to the finish line!
How can you win a bidding war against 7 or 8 other contracts? We serve home buyers in Northern Virginia, Maryland and Washington D.C. In the District, the competition for condos, rowhouses, and single family homes is fierce. For our home buyers looking in Howard & Anne Arundel Counties, there seems to be more inventory available and less competition.
Still, the best way to find your home this Spring is to understand the market and know what strategies will work best for you and your family.
Remember, know your financial limits before you make the decision to buy a home in a competitive market. Your buyer agent should educate you on the home buying process. Take your time writing a contract and understanding all the contingencies. Contingencies protect you should, for example, your financing falls apart or the inspector discovers a cracked foundation.
- Get into a house of interest as soon as it comes on the market. We have had success winning contracts just by being first with a full priced contract.
- Consider doing a pre-contract home inspection. This type of home inspection is abbreviated and typically only includes the major systems in the home. If everything checks out and you want to move ahead with an offer, you can write your offer without a home inspection contingency. (this would be a more attractive offer for the Seller)
- Consider including an escalation clause in your offer. The language of the escalation clause differs from state-to-state. You would decide on the escalation factor and cap meaning how high you would go over another competing offer. Here's an example: You would offer $540,000.00 for a home with an escalation factor of $2000.00 and a cap of $548,000.00. If there was a competing offer, the escalation clause would kick in and go $2000. above the other offer up to $548,000.
- Could the Sellers benefit from a free rent back? Are you in a position to offer? With a free rent back, the Settlement attorney holds a deposit from the Sellers, after Settlement, during the rent back period. If you are offering this as a freebie, you would pay the PITI (principal, interest, taxes and insurance) at a daily rate. If a free rent back isn't possible, just offering it as an option could tip the scales in your favor.
- An all-cash offer is always attractive to a Seller. The offer can be all cash but you can still get a mortgage on the property. When offering all cash, you show that you have the ability to make the purchase without a mortgage but again, you have the option to apply for a mortgage if desired.
The most important question to ask is, "Are you comfortable with your home buying strategy?"
Surround yourself with honest experienced professionals who will help you learn the best way to buy a home.
"How to Buy A Home" by Victoria Ray Henderson
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