Here is some great advice for buyers looking to purchase a home in a "hot" market. This information is valid in Austin or any other "sellers market". A sellers market is one where there are more buyers than available homes, therefore competition is fierce. So be prepared!
I recently met a couple who had written 13 offers on various homes in Northern Virginia - with no luck at all. And they sounded really, really motivated. Right now, they are living with the in laws. Not great.
They were working with an agent who I know is good at what she does. She works hard, knows the territory and plays well with others. So what was going on here? Their plight is not unusual. Around the DC metro area, inventory is tight, especially in the under $700,000 price range. But it's possible to find a great place, whatever your budget. Here are some of the things I tell my own clients looking for their first homes:
- Don't look over your price range. Chances are strong you will be in a multiple offer situation, and you need some space to go up. If, for example, you have been pre-approved for $700,000, try to keep your search to under about $675,000.
- Instead of going for the homes that are ultra-staged with universal appeal, consider the Plain Janes that, with a coat of paint and a little imagination could become your dream house.
- If you are going into a bidding war, remember that you need to be green and clean. The price (the green) is important, but so are the terms of your offer (the clean). The sellers will be looking for the buyers who look the most likely to complete the transaction.
- Lots of buyers try to be the first in the door as a new listing goes on the market. But don't ignor the wallflowers who have been sitting with no suiters. A lot of the time, they'll have some fixable flaw that has scared off other buyers. Other times, the prices are way too high, but you can catch the sellers at a point where they are sick of making the beds and ready to deal.
- If you try to find the smallest, least expensive house in a great neighborhood, you could be competing against the professionals who are looking for renovation or rebuilding projects. They are likely to be a lot more agile than you are when it comes to financing the deal and eliminating contingencies, especially for home inspections, financing and appraisals.
- Make sure your agent finds out what the sellers need in terms of a settlement time frame and if there are any other conditions that could make your offer more attractive to them.
- Keep an open mind about where to live. Here is Washington, there are many first time buyers who just can't afford the old favorite neighborhoods, and they are turning formerly funking areas into the new cool places to live. And if you don't have to be in town, there are some wonderful values in the Maryland and Virginia suburbs.
- If you started out looking for a detached, single family home, reconsider whether a townhouse or even a condo could work for you.
- It sort of goes with saying that you need to be pre-approved for your mortgage. And if you are smart, it will be with a small local lender rather than one of the big guys.
- Keep it simple. Don't ask them to leave their Labradoodle or grand piano.
So I really wish these kids, not to mention their agent, good luck. August might work. It's hot and most buyers are at the beach, so if they stay home and househunt, there might be less competition!