When prices and interest rates fall, new buyers are itching to take advantage of them and get into a new home. But what happens when buyers find there is little available to them? That's right: bidding wars and multiple offers.
When real estate is moving fast, it can pay off big to understand how to move quickly, and take advantage of opportunities that others miss out on. In real estate, the early bird doesn't get the worm, the early bird gets the home.
Making a big decision in a fast paced market doesn't have to be high pressure. If you go into your purchase prepared, you'll be in great shape to make that offer when the right home comes available. Here are the best techniques to make sure you're able to beat out everyone else.
1) Get a Savvy Realtor
In a quick market where you need to move fast, you also need an agent that can move quickly and give you all the tools and advice necessary to make an informed decision. Technology is huge when it comes to moving quickly. Gone are the days of running around town getting signatures; digital docusign technology is the way to go. A savvy agent will understand that you're looking to move fast and will treat you with a sense of urgency. They will typically be young, energetic and have strong tech background. With most multiple listing systems, your agent (if they know how) should be able to create saved searches that notify them of new listings as soon as they hit the market.
2) Know the Contract
When you've got to get a contract in, you can't waste a few hours having your agent explain the terms and conditions. Before you search, before you put an offer in, have your agent explain the entire contract from beginning to end, so you know exactly what it contains. After a thorough explanation, ask questions! Most real estate contracts are very standard, and only a few sections need to be changed per home. Trust your Realtor to expertly write the contract to your benefit and be ready. Those few hours could make the difference!
3) Pre-Approval and Proof of Funds
To back up a strong contract, make sure your lender has provided you with a pre-qualification letter, or even better, a pre-approval letter. This letter will let the seller know that you are financially stable enough to afford their home, which increases the likelihood of the deal closing. Proof of funds can come in the form of an earnest money check, showing the seller that you "earnestly" want to purchase their home. These two items are becoming more and more commonplace as standard attachments to any contract.
4) Be Time Flexible
A lot of real estate transactions get done over weekends, which is typically when people are able to be out home-shopping. But, what if a perfect listing comes available on a Tuesday? Are you going to wait three or four days to go see it? I like to tell my clients to be time flexible as much as possible. Heck, it could either save you a lot of money, or get you into the right home in at the right price. Set up showings for the late afternoon after work (4-6pm) and get into those houses if you can. Better yet, if you're comfortable doing so, tell your employer that you're in the middle of an epic house hunt and that you may need to dip out for an hour or so to see a home. In the grand scheme of things, how important is an hour of work when you're making probably the biggest investment of your life? Put it into perspective.
5) Put Your Best Foot Forward
You could move as fast as possible, but if you throw in a low-ball offer, you'll get laughed out of a contract. If the comparable properties in the neighborhood support the list price, come in at or near a full price offer. Sometimes, the time required to negotiate back and forth can open opportunities for other buyers to come in and submit a higher offer. A reasonable offer will get a reasonable response from the seller and will prevent animosity during the next phase. Make the decison whether you want to get a "killer deal" or whether you want to find the best house.
With these tools in mind, you'll be the one hearing "we accept". Good luck!
Great info on everything real estate.