I'm off on a long weekend relaxing and enjoying the ocean. During a moment of temporary insanity, I decided to drop by a few of my favorite stores. In the midst of my adventure, it dawned on me that it's Black Friday. I'm sure that should be changed to Black and Blue Friday.
It was entertaining to watch all of the bargain crazed shoppers. Each one trying to get that one item that was 50% off from 10:00 am to 10:15 am. Pushing, shoving, shouting, elbowing, tripping, griping, grumbling, stumbling, fumbling, well, you get the idea. I know it has to be stressful for all involved. I was mostly window shopping, so I didn't really care what the ninja shoppers were up to.
It made me think of the stress buyers go through when they are buying in a hot market where multiple offers are the norm. These Black Friday shoppers could do a number of things to avoid the stress, but that's not the purpose of this blog. What can buyers in a hot market do when they are confronted with buying challenges? Buyers:
- When you find a house you are really enamored of, remember, "Don't fall in love with anything that can't love you back." A house is just a house. If you miss this one, there is a great chance that a better one is just around the corner.
- Always know the market. Ask your Realtor to keep you up to date on properties in your market criteria, and make sure you have good comps to make sure you're not getting carried away with the multiple offer madness. It's easy to over offer on a house because of the bidding war. The problem you may run into is that the house will not appraise for the offer amount, and you will have to ask the seller to drop the price to meet your appraisal or you'll have to bring more money to closing, or worst case scenario, you'll give up the offer.
- Keep looking during the process. You don't need to make offers on other properties, but if you find one that better suits your desires, pull out of the bidding war and buy the property that isn't being fought over.
- Make a buying plan and stick to it. You may increase your purchase price a little if it's within reason, but increasing 20-40% is not a rational purchase. (See the first point) My younger son put an offer on a house this past summer. The house sold for 40% over list. His offer was 20% over list. That was a limit of what was sane for that particular house. The buyer bought beyond value of the house by $20000. Why? Multiple offer hysteria.
- Put your best foot forward first. You may end up in a multiple offer situation, but there may be no second chances to make a highest and best offer.
- Be willing to walk away. There is no logical reason to pay too much for a home when there are homes you can afford that meet your needs, wants and desires.
Black Friday is only one day a year, but multiple offer scenarios can pop up at any time. Be ready with a plan to engage when you find a property that catches your eye, but also be ready to move on. Don't get caught up with the craziness. It will blind you to other opportunities.