What to Do in a Hot Market? How Do You Get a Home?

By
Real Estate Agent with Keller Williams Capital Properties DC AB15253

The market in the DC metro area is red hot in some spots.  I recently made an offer on a property in Dupont Circle that received 9 offers and escalated probably 10% over list price.  A home in North Arlington also went way over list price - and not to my buyer!  So what are you supposed to do if you want to buy a home in this spring market?  The sellers' market is alive and well in parts of Washington DC and close in suburbs.  It is easy to get discouraged as you make multiple offers in a month or two and come away without a home. 

You want to buy a home but you think you will never win the bidding war.  You only have so much money - what are you supposed to do?

You still can purchase the house of your dreams if you are willing to expand your search.  Rather than start looking at the homes that are just listed, try reversing your search criteria and look at the homes that have been on the market for a month or longer.  Buyers immediately move to the newest listings and throw offers at those homes!  If a property is over priced when it first comes on the market, it may not receive any offers.  It lingers on the market for a few weeks and then the seller has to reduce the price.  By then the "damage" is done.  The seller has missed that window of opportunity where lots of buyers want to buy and now the seller is grateful when someone - like you - comes along with an offer..   If you are the first person to make an offer, the seller might be willing to shave thousands of dollars off the price or to make concessions in other areas to sweeten the deal.

When to Offer a Lower Price
An owner who has to move by a specific deadline is motivated to sell. Someone who is moving for a new job will want to wrap up the process of selling the house in time to relocate and start over. If the deadline is fast approaching, the owner may be willing to cut a deal. You can ask the real estate agent why the owner is selling the house, but he or she may not be able or willing to tell you.

How to Negotiate
If you want to offer the seller an amount below the asking price, make a reasonable proposal. The seller may be willing to make a counteroffer and negotiate, but not if you make an absurdly low initial offer.  Remember that the purpose is to buy a home - not establish superiority over the seller.  A ridiculously low offer is just going to annoy or even insult the seller and shut down any future negotiations.  

Submit a written purchase offer specifying the price you are willing to pay with all the relevant terms and conditions that you need. The offer should be accompanied by a solid “earnest money deposit,” large enough to demonstrate that you are genuinely interested in the house. Set a short time limit for the owner to accept or reject your offer. That can help you avoid getting into a bidding war with other potential buyers.

If the owner makes a counteroffer that is lower than the asking price but higher than what you are comfortable paying, you don’t have to accept it. No matter how much you love the house, you shouldn’t borrow more than you can comfortable with. 

Don't give up though.  Make a counteroffer yourself which is lower than the seller's counter but higher than your initial offer.  Search for that happy spot that bridges the gap.  See if the owner is willing to make other concessions if he or she doesn't want to budge on price. You could ask the owner to make repairs or pay some of the closing costs.

If you and the seller are unable to agree on a price, be prepared to walk away. You may find another house you like even more at a lower price in the near future.

Don’t Be Afraid to Negotiate
Don't assume that there are no homes out there for you.  You just have to look a little harder in a hot market. Depending on the micro-market and the owner’s circumstances, the seller might be willing to significantly lower the price of the house, but you won’t know unless you make an offer. Your real estate agent can provide you with advice and guide you through the negotiation process.

Change Your Price Point

This is not a suggestion to increase your price point.  If you are being outbid on homes, then you need to look at homes with lower list prices.  If you drop your search range by $50,000 then you can bid more for a home and have a chance of winning.  It isn't that the people you have been bidding against have more money - it is that they are looking in a price range where their money goes further.  They got smart.  Why aren't you? There are homes that will meet your needs and most of your wants.  At a slightly lower acquisition price you will have some extra money to put in your wants later.  

There is a happy outcome for you - you just need to look for it in different places. 

 

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Topic:
Home Buying
Tags:
seller market
dupont circle condos for sale
hot market strategies
advice for buyers in a spring market
north arlington home strategies

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Rainmaker
4,875,223
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
Marketing Agent for The Todaro Team

Good morning, Lise Howe good advice here.... Change Your Price Point...

the market in my area is hot also... listings are king....

Apr 04, 2019 05:46 AM #1
Rainmaker
2,453,272
Brian England
Arizona Focus Realty - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

Your clients are definitely in good hands when trying to navigate and purchase a home in a hot market.

Apr 04, 2019 05:59 AM #2
Rainmaker
3,525,914
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning again Lise. This is so good. I love your specifics here and everyone should keep this in their pocket.

Apr 04, 2019 06:56 AM #3
Rainmaker
1,850,536
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Good morning Lise - you have some great advice here.  Some homes are right for the buyer but the agent can help find them.

Apr 04, 2019 08:48 AM #4
Rainmaker
1,157,670
Sheri Sperry - MCNE®
Coldwell Banker Residential Brokerage - Sedona, AZ
(928) 274-7355 ~ YOUR Solutions REALTOR®

Great advice Lise Howe - I always let buyers know that Days on Market matter.  You have offered a lot of sound advice to buyers in hot markets. Sometimes it is the area and sometimes it is the pricepoint. 

Apr 04, 2019 02:30 PM #5
Ambassador
3,779,825
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Hi Lise= you've offered some excellent tips to help buyers move from the "missed out" to the "Just bought" group. They may have to make some adjustments but it can be done. 

Apr 04, 2019 06:29 PM #6
Rainmaker
2,831,108
James Dray
Fathom Realty - Bentonville, AR
Exceptional Agents, Outstanding Results

Morning Lise.

When we are house hunting I rarely look at any places that are new on the market.  I wait until they are in the market for at least 30-60 days.  

Apr 05, 2019 12:44 AM #7
Rainmaker
3,192,225
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

We are doing exactly that ....looking at the lingering listings for those who started late...or thought they could offer toooo little.

Apr 19, 2019 06:54 AM #8
Rainmaker
3,073,305
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Happy Friday Lise Howe and great information that we can all still learn from no matter how long we have been this business.  Can I reblog this in May?

 

Apr 19, 2019 07:55 AM #9
Rainmaker
3,073,305
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Happy Easter Lise,  I hope you havea great day with lots of food to enjoy with your family.

 

Apr 21, 2019 08:29 AM #10
Rainmaker
4,023,952
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Lise, we saw about seven years just like this, and gladly it has cooled off.  Now the buyers have a chance.

Apr 28, 2019 12:03 PM #11
Rainmaker
1,963,709
Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Southlake, TX
Selling Homes Changing Lives

Lise Howe - You always provide great information. I like how you explain things so clearly. I wish you and your daughter well. 

Apr 29, 2019 09:23 PM #12
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Lise Howe

Assoc. Broker and Attorney Licensed in DC, MD, VA,
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