“It was the best of times, it was the worst of times”
Charles Dickens, A TALE OF TWO CITIES
There is no better way to describe our current real estate market than this opening from Dickens’ classic that centers around events that led to the French Revolution. Well, it’s a novel, a love story, and if you haven’t read it, you should. But this blog isn’t about classic literature, it’s about REAL ESTATE and all the little tricks of the trade I’ve picked up by being an ‘Insider”. SO if you want to read more about Doctor Manette and his release from the Bastille in Paris in the 18th century, you’ll need to go somewhere else.
We are in THE BEST OF TIMES if you are selling a house in today’s market. House prices around the country are doing great. And here along the Wasatch Front it’s better than ever. Home owners that believed they had seen an all time high in 2007-2008 only to see it all crash and burn have finally seen their values go past that high water mark. Stories of multiple offers and houses selling for more than their asking price are as easy to come by as a political scandal these days. And just like the news out of DC, many of the stories of people selling their houses for more than asking price are true!
So congratulations if you are a seller and have enjoyed the recent run-up in values! Not that you did anything for it, but good job owning a home. It’s still a safe bet, and you’ve benefited from it. But… what if… you are trying to buy??? (Insert blood curdling scream here)
WHAT ARE YOU UP AGAINST?
It is the WORST OF TIMES… if you are buying. As of today, June 19, 2018, the market shows no signs of loosening up for buyers. There is just no inventory. In my own little market of Tooele County, we have 185 single family homes on the market. More than 240 sold or went under contract in the last 30 days. That means we have about 20 days or so of inventory. That is a crazy low number! The really crazy thing is it’s been that low for around 18 months or so, with some fluctuations. In a later blog I will share what I see coming, but this post is about dealing with challenges of trying to buy your DREAM HOME in a sellers market.
Let me begin with a reality check… this is not going to be easy. It’s true that just about every house that comes on the market that is priced right is going to get multiple offers. I list several houses every month and I deal with it on the sellers side. Our team also represents buyers and we deal with the challenges of watching homes go under contract, sometimes before our buyers even get to see it! We’ve seen houses sell for $5K, $10K, and even $20K+ higher than asking price. Offering to pay more than asking price shouldn’t be a secret. But how do you get the house of your dreams even when you’ve offered more than asking and they still take another offer? Here are the 4 steps I teach my clients and buyers agents that give them the best shot at moving into the perfect home.
STEP 1- Make sure you know what you DO NOT want
Most prospective buyers begin by making a list of what they absolutely HAVE to have. SO let’s not waste time on that! What we do is come up with a list of things that you absolutely, positively, cannot live with (green shag carpet anyone??). For some people it’s the style of home. For some people it’s the number of garages. For some people it’s the direction the house faces. Whatever it is, identify it and STAY AWAY from those homes. Your time is precious. But more importantly, while you are wasting time looking at houses you would NEVER buy, your dream home is being viewed and offered on by the family that loves the same things you do, and hates the same things you do. Don’t let them beat you because you were wasting your time looking a rambler when your dream has always been to live in a multi level with glued on tiles and concrete countertops! (???)
STEP 2- Expand Your Search
Now, I don’t want to confuse you here. I just told you to get specific about what you don’t want. The next step is to now open up your search criteria. For example; You ABSOLUTELY, POSITIVELY HAVE to have 4 Bedrooms!! There’s a home right next to the school you want your kids to attend, two blocks from the karate studio little Susie goes to, and next to little Joey’s favorite park… but it only has 3 bedrooms!! If you don’t go look at it, you may not learn that what some people call an office others call a bedroom! OR, there is plenty of room in the basement to finish an extra bedroom or two or even that craft room your husband/wife has been begging for! You won’t know if you never look. Make sure it DOES NOT have any of the things you ABSOLUTELY CANNOT have… that would be a waste (think style, location, etc). There are some things you can never change. Many other things are easily changed once you are a homeowner.
STEP 3- What’s the seller’s ‘Hot Button’?
Most people assume that all the sellers care about is price, but that simply isn’t true! Finding out what REALLY matters to the seller is vital if you are to win out and buy the house of your dreams. To a seller that has already moved because of a work relocation, getting their home sold before the next mortgage payment is due is the most important factor. So while another buyer is putting together an offer that is higher than yours, they also ask for 45 days to close. The seller can’t wait 45 days, so if you’re able to close quickly, you get the deal, even if you are asking less!
STEP 4- Money money money money!
I know I’ve been saying price isn’t the end all, be all. It’s not. In this case, I’m talking what kind of money are you using. If you are getting a loan, what kind of loan are you getting? Does your lender have all your supporting documentation to be able to write a pre-approval letter? As a listing agent, when one of my clients receives an offer, I always take the time to make sure the loan the buyer is getting is good by calling the lender. I ask a series of questions that lets me know if the buyer is really able to perform. Not getting a loan?? Using cash!!?? Make sure that is highlighted in your offer. Make sure the seller knows you are a cash buyer. This may seem obvious in the real estate purchase contract, but don’t make any assumptions about the seller or the seller’s agent ability to read the contract correctly!
STEP 5- Hire the right agent-
As in a previous post, I’m willing to admit this seems self-serving. I’m not telling you to hire me. There are several good agents out there that will go above and beyond to find the right house for you. In my business, that includes doing some extra work for our buyers. If there is something they are looking for that simply is not listed, we will go to the neighborhoods, knock on doors, send letters, and do whatever it takes to find that dream home for our clients. Make sure you hire someone that is willing to do the same, or more! Additionally, another reason you hire an agent is for market knowledge and negotiation strength. Most people underestimate the latter of those 2. But think about it for just a second. If you’re a typical American, you will buy and sell a home every 7 years. I sell one house every 5 days. If you apply the principle of repetition, (the more you do something the easier it gets), I’m bound to be significantly better at it than someone who does it once every 7 years. Trust the professionals you hire. And hire great professionals. It will make a difference, and save you more than you ever could doing it yourself.
There you have it. If you want more info, check out our tip videos we’ve made. Much of the same information is shared, but you get to see what I look and sound like. Whatever you do, realize that this market reveals heaven and hell, the best of times and the worst of times. But don’t lose hope. Your slice of the dream is available!
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