It’s hard to not hear about it here in the Austin area–how many people are moving here per week, per day, how home prices are rising, or just hearing the phrase “total seller’s market.” What does all of that mean for someone wanting to buy a home here? What should you do to be the best prepared buyer and get your offer accepted? We’ll take a peek at this today.
Most basically, a seller’s market (in real estate) is one indicated by a low inventory of homes for sale in area. To further elaborate–Anything less then 4 months of home inventory is considered to be a ‘seller’s market’, in which because there aren’t enough homes for sale/homes selling so quickly the seller’s have the advantage.
Working with a Realtor can help you figure out if the area you’re looking in is a tighter seller’s market then others. Generally speaking, it’s a seller’s market in the Austin area across the board–but there are areas where you might have more luck then others as far as advantage goes. Also, did you know as a buyer you don’t pay a Realtor to help you find and negotiate your home deal. True story–so, I’m a bit biased here, but I HIGHLY recommend you enlist a Realtor when home searching. They can do the work for you, find the homes–some of which maybe you weren’t even considering, pull market reports, write and negotiate the offers, ride through multiple offer situations, and work with the seller’s side instead of you having to do it…kind of nice 🙂
Okay, and now for some tips going into a home search in a seller’s market!
Tip #1: Don’t lowball your offers
One good way to get your offer rejected or passed over in a multiple offer situation is to low-ball. Like I mentioned above, your Realtor should have pulled that CMA (comparative market analysis) and come up with a fair offer range for you. If they haven’t–they should. Now, to be fair, if the home is indeed well overpriced–a reasonable offer at what looks to be market value is okay. However, if the CMA and your Realtor find the price is pretty spot-on, and you want to offer $20k less in a fast-moving market-don’t expect it to be accepted.
Tip #2: Be willing to put up more earnest money
Here’s the thing, most folks do 1% of the purchase price–which is fine, but if you know it’s going to be a tough offer situation (again-multiple offers) you may want to think about putting up more in earnest money. It just makes the offer look that much more serious–and when you close, it’s credited to you anyways–so if you’re able to do put it up, I would.
Tip #3: Don’t ask for anything!
What I mean here is that, when you get into these types of tight offer/multiple offer situations (which your Realtor will make you aware of quickly) You want to have the cleanest offer you can. Don’t ask for the fridge, the TV, the grill, painting certain rooms, nada. You don’t want to lose a possible bidding war over fridge, trust me!
Tip #4: Working the contract a bit
Here, I’m saying–maybe a shorter option period would look better to a seller (it gives you a little less time to get the inspection done/back out). Or offering to pay for a survey if the property requires it. Adding to that, maybe offering to pay the seller’s title costs. Again, your Realtor can advise you here–but when you’re in a multiple offer situation, every little bit helps.
Tip #5: ***GET PRE-APPROVED FOR YOUR MORTGAGE NOW!***
I cannot stress this one enough–which is why I put it last, so that hopefully it sticks with you. You will waste A LOT of time without a pre-approval letter. You may want to look at homes too expensive for what you can actually afford–and then be totally let down when it comes to wanting to put an offer in. Unless you’re paying for a home in cash–you’re going to have to go through a lender eventually so, why not just do it at the start of the process and save yourself the hassle?
Not to toot my company’s own horn here–but if you need a solid recommendation, Coldwell Banker Mortgage is awesome. I mean, before I was in real estate, I used them for my own home and had nothing but a great experience and LOADS of communication with the staff there when my husband and I were freaking out about the loan/appraisals/everything. I work with an mortgage advisor in our office here who is so quick to get folks pre-approved, and will bust his butt in every which way to get you approved in any way he can.
His name: Mannon Harmon and let him know I sent you-I don’t get anything out of the deal other then knowing that he takes care of my clients and keeps my clients and myself updated on every step of the of the transaction. Mannon is..well, the man!
That does it for my buyer’s tips today–Your Realtor should be able to guide you through these tips and the steps to make a great offer in this tight market, when we’re running into so many multiple-offer situations, but being aware of these tips ahead of time will just make you a more savvy home-buyer.
Peace, love, and house-keys!