Josh Elledge - Chief Executive Angel
Listen to me talk about this article in my podcast.
Many areas of the U.S. are currently experiencing a “seller’s market” in home real estate. Trying to buy a new home in that environment can pose some challenges. Numerous buyers vying for a small selection of homes can drive up prices, increase the chances of bidding wars, and sometimes even result in homes selling so quickly you didn’t even get the chance to tour them. What to do?
(1) Get an experienced realtor: Without one, you’ll find it almost impossible to see homes before they are already under contract. Among other benefits, a seasoned realtor can show you a home quickly, and advise you on typical home values, so you don’t overpay in a competitive market.
(2) Get active in the listing database yourself: Because of today’s technology, relying only on your agent to find possible homes may not be the best strategy. You might miss the opportunity of ideal properties. (Not because your agent isn’t watching on your behalf, but because no agent is available constantly.) To give yourself an advantage, use the area of the official regional listing database that is available to the public. This way, you increase your chances of finding out about a property within hours of listing, and you can contact your agent immediately to set up a showing.
(3) Don’t panic that you’ll “miss out”: Even though homes are selling quickly, and competition can be fierce, still be smart. You’re making a huge financial decision, family decision, commitment decision, and life change. Follow these tips to help avoid making a huge mistake:
a. Never offer after only seeing a home once: If you considering making an offer, set up a time to tour the home again. It is your agent’s job to convey your seriousness to the seller’s agent – who in turn expresses it to the seller. Most sellers will wait a reasonable amount of time before accepting another offer, especially if they think they could get multiple offers – and possibly have a bidding war. By waiting and seeing the property again, you’ll notice things you overlooked the first time. You can then consider this new information, and either solidify your choice, or change your mind without any harm.
b. Take an objective person with you: Because they aren’t emotionally tied to the home, they will see and consider even more aspects of the home, and can bring them to your attention.
c. Count the cost: Before offering on a home, count all the costs involved. In a competitive market, it can be tempting to up your budget, and/or to commit before realizing all the costs involved with a property. Will you drive more and spend more gas? Take on new or higher taxes? Have higher utility bills or insurance bills? And the worst one: Become house poor? A manageable mortgage payment should be 25% (or less) of your monthly household take home pay. Although you likely could borrow more, it doesn’t mean you should. Since the mortgage is only one part of home costs, it needs to stay in balance to afford other necessities.
d. Have a checklist: When listings are scarce, it can be tempting to compromise too much to get a new place. To avoid this financial blunder, create a list of “must haves”, and a list of things you could compromise on. Include furniture dimensions, your home layout preference, and more. You’ll save time, energy, and emotional stress by ignoring homes that don’t fit your list; freeing you up to focus only on ones that could be your perfect new place to call home.
