How Do I Win This Bid? Buyer's Frustration in a Seller's Market
Across the country, it is a fury of sales created by possibly the pandemic and low interest rates as a result. With people looking to make their families safe, home sales are in a trend that has not been seen ever.
The pandemic has put working people into a virtual job, where they are working from home and not needing to go into their actual place of work to be productive. In fact, people are realizing that they can be more productive working remotely as there are fewer interruptions and distractions from co-workers.
This all feeds into the demand for more space or in the case of renters, finding a home of their own and paying rent instead of someone elses' mortgage.
So we start to look for houses only to find that there are few options. Already the ideal dream becomes hazy. If the search started without contacting an agent, then the shock of seeing a house being under contract within short days of going on market starts to feed the anxiety.
Find a Professional REALTOR® There are many real estate agents that are more than willing to secure you as a client and get you into a house. It is, however, paramount to find an agent that has the knowledge and experience to offer the counsel needed at the beginning of the home search that makes the process more productive and less stressful.
Getting Pre-qualified for Purchase Knowing what you can buy is made easier when you know how much a lender is willing to afford you in a mortgage. Nothing can be more frustrating than believing you have found the ideal home and then getting the reality that it is well beyond your purchase ability.
While sitting with the lender it would also be beneficial to start the process of getting pre-approved which involves a thorough release of your personal financials to the lender including banking and tax records. As this is normally a part of the approval process once a home has gone under contract, you are now shortening the amount of time needed to get loan approval which may be important to some sellers.
Also, the type of mortgage you will be getting is important to some sellers. In a highly competitive market a high price on a contract with a government backed mortgage may not be in your favor, as the market is competitive and the simpler the better to win the bid.
Keep contingencies to a minimum An offer to purchase with requests for seller concessions gets put behind a cleaner offer. If the overall condition of the house appears to be sound, it may help the case to request inspections for information only. If something shows itself that was not included in the property condition disclosures, it may be something that the seller is willing to credit. In our area, it is not uncommon for a buyer to absorb an item within the scope of the inspection if it's repair or replacement is under $200.
Down payments to Ease Mortgage Amount To ease the burden on an appraisal for the mortgage, it would make the contract more attractive if the buyer were putting down some significant money on the purchase to make for lower mortgage payments, and not necessarily to avoid PMI, If the purchase amount was already over asking, which is most likely the case, money down is the friend of both the seller and the buyer and could make the offer more attractive.
Re-Evaluate the Needs of the Purchase After losing a couple of opportunities, the buyer should re-valuate the wish list for the purchase. This is more practical especially if the buyers are younger and this is their first purchase. If the purpose is space and not paying rent, then the idea should be to not look for that forever home and focus on something that is more practical and manageable.
Many of our parents started out small and they purchased as the needs became greater. Also, for a first time home buyer a smaller house is a better way to ease into the mindset of home owner as now all the maintenance becomes your responsibility and not the landlord's.
Many families make 3-4 purchases of homes in their lifetimes, so buying the biggest first is not always the best way to go. Within 4-5 years, your position may be different and as the home would have gained equity, there is a better likelihood of getting a larger home easier, and quite possibly in a totally different location as jobs do change.
Stay Focused With the proper agent, the process should be easy, however that doesn't negate the reality of the frustration that may creep into the wait to find the right house. Communicating with your agent just to chat and reconnect is key, after all the agent has the best insights as to what has transpired in the marketplace. I have prepared lists of closed properties for my clients so that they can see each sale and the amount of difference between the listing price and the closing price which will give them a feeling for where they might have to be one the right property hits the market.
If you would like information on homes for sale in Central CT, please call me at 203-206-0754 or send me an email. I would be happy to assist you or to discuss homes on the market in Central CT
How Do I Win This Bid? Buyer's Frustration in a Seller's Market
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