Several clients have been missing out on some homes they truly wanted and it's a trend I feel will continue in our area of Boise and Nampa Idaho. Tami Merriam my real estate partner and I have seen this scenario over and over again especially in last month and now well into March. We've seen a pickup in business and more buyers are getting off the fence and finding their dream homes.
Buyers watch out for there are many other buyers and investors out there and they are snapping up some great bargain priced homes causing much frustration for many that were hoping to have their dream home.
For many news watchers the media tells stories of buyer's purchasing homes for so much less than the asking price. Buyers decide that based on these stories in the Treasure Valley area they can do the same. However this is simply not happening over here right now. Price reductions of 10k, 20k and higher usually occur on the higher priced homes such as those found in the $200,000 price range. Also depending on location sometimes the homes go for higher than their asking price.
We work with many clients shopping for homes in the $70,000 to $140,000 price range. I must have shown about 50 homes in the past 3 days to several clients.
When I run the comparables all of these homes they almost always turn out to be one of the best priced homes in their respective areas and sometimes in the entire city of Boise, Meridian, Nampa and Caldwell.
One home that was sitting 120 days plus was price reduced from $130,000 to $122,000 and it received multiple offers within 2 days of the price reduction. Another home being watched by several of our clients and I'm sure by others was just reduced from $142,899 to $119,999 and the agent's phone has not stopped ringing the past day. This home will be sold in the next 2 business days while potential buyers scramble to view the home and to justify why they should offer even less than the asking price. One problem is that despite TLC or any repairs that this home or other best priced homes you may encounter need the price already reflects this and many buyers/investors know this and offer full price or higher for the home.
Another thing is that investors are still paying cash for these types of bargains. I've seen 3 homes go pending in the past day all under $130,000 in Boise and it wouldn't surprise me if 2 or all 3 go for cash from an investor.
Solution:
Buyers must be prepared not only to see the home the same day that it is price reduced but prepared by having a pre-approval letter from a lender in their hands and also sent to their agent.
A quick check list for these types of homes include:
1) Be available and call your real estate agent right away to show the home the same day, within hours if possible.
2) Have your agent call the listing agent and inquire by asking the right questions on the home such as making sure it will qualify for the lending you need. (FHA, VA, etc.) An agent in the know will ask the right questions and save you time and frustration.
3) Make sure you have the earnest money available whereby a check can be issued typically for 1% of the purchase price (this is negotiable talk with your agent)
4) Be ready to offer list price and maybe even higher if you need help with prepaid and closing costs (this can be rolled into a higher price whereby seller sees this as no concession thereby increasing your chances of an accepted offer).
5) Make sure your agent shows you the comparables for the home
6) Feel good about the monthly payment (obtain good faith estimate from your lender to include property taxes and hazard insurance that goes into your escrow account)
7) Write the offer today! Don't delay for other offers are headed to the agent as your considering what to do on the home. We've seen it happen time and time again especially when a home becomes one of the top 5 priced homes in the area.
Look for further articles, blog entries and stories from us on this subject. Contact us by email or phone with any concerns, questions or advice. We would be honored to represent you as your real estate agents through out the process!
Thank you,
Scott Messing & Tami Merriam with ERA West Wind (208-761-7609)
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