By John McCarthy
The consensus among buyers, sellers, Realtors®, mortgage agents and anyone else who is in real estate is that it is absolutely crazy out there. There is a huge lack of inventory and lots of qualified and eager buyers. Most homes are selling immediately. Many don’t even make it to the scheduled Open House. According to data released by the Multiple Listing Service (MLS) there were 53.5% fewer homes for sale in the 2nd quarter of this year v. last year, with the percentage of asking price received at 99.5% in the same time period. Sellers are getting, on average, their asking price almost immediately. Some of this lack of inventory can be attributed to sellers delaying putting their homes on the market due to the pandemic but that doesn’t fully explain it. Right now, as a seller you are dealing with multiple offers (assuming it is marketed and priced correctly) but as a buyer you are faced with sometimes overwhelming competition. While I have written about what you can do to get your home ready for sale to achieve the best possible results, I thought I would explain some of the things you can do as a buyer to get you that house you love.
Find a REALTOR®: If you don’t know a REALTOR® ask friends, family or co-workers for referrals. It is important that you find a full time agent who preferably lives in the area you are looking in. This REALTOR® should have a proven track record of success as well. Does you no good in this market to work with someone can only look for homes on weekends or has to travel long distances to show you a home. (My contact information is at the bottom of the articleJ).
Don’t buy a house you don’t love: This may sound obvious but if you have been visiting home after home and making offer after offer on homes that you really want you may decide to settle for a home they don’t like. Don’t. The home you are buying should work for you and be one you see yourself happy in.
Get ready before you start shopping: Get your preapproval in place. I can’t tell you how many times I have heard from buyers the following: “oh I have a friend who is a mortgage agent; he/she can get me a preapproval letter anytime. Not a problem.” It’s not a problem until your friend isn’t around to give you this preapproval when you want to submit your offer. A seller isn’t going to wait for your friend to run a credit check or verify your income before sending out a preapproval letter.
Fly By: Use the web sites that are available to you. Most of the sites out there allow you to virtually stand on the street or view the home from the sky. Before you drive by or schedule an appointment take a look from these vantage points. You may find that the house you love and feel is underpriced may be that way because it is next to an active landfill.
Drive By: Drive though the areas you are looking in. Not just during the day but at night and on weekends. Get a feel for the town if you aren’t familiar with the area. It also wouldn’t hurt to drive to and from work during commuting hours to get an idea of what a typical day might be like. Got a call from a buyer who lives out of state, he wanted to see 4 houses, one in Hamilton, Ipswich, Beverly and Marblehead. Asked if we could do them back to back. Told him sure, but it would take a few hours. He had looked on a map and said that it was only a few miles between each one. Had to explain that on paper the ride from downtown Ipswich to Marblehead looks easy but that is not always the case if you know how difficult it is to get somewhere and what traffic can be like around here.
Nothing Is Perfect: While your offer is contingent on a home inspection every house, new, old or in between, has issues. In this market many sellers won’t fix anything as there are backup buyers just waiting for your deal to fall apart.
Sweeten the Pot: If you can pay in cash, great! Most buyers can’t though so try to find ways to make your offer more attractive to a seller. Find out when the seller would like to close and work with that date. Consider whether you can waive any of your contingencies (financing or home inspection). Lastly, see if the seller needs time to move and if so maybe you can purchase the home and rent back to them for a period of time at a less than market priced rent.
Wants v. Needs: In a competitive market, many buyers may have to compromise on what they want. You may not look at homes with less than 4 bedrooms as you need that with the 3 kids. However, although you want a 2 car garage you may decide to move forward on the house you just saw as it has that 4th bedroom and fits all your other needs.
Be Ready: Don’t assume that the house you see online will be there by the weekend. If you are truly serious about buying, have your preapproval in hand, checkbook ready and leave work early.
Finding a home in this market is certainly a challenge but one that I know we can overcome. Get ready by calling your experienced, local REALTOR® (me?) and you will come out on top in your new home.
If you have any questions about this article, real estate in general or are looking to buy or sell a home please contact me, John McCarthy at Rowley Realty, 165 Main St., Rowley, MA 01969, Phone: 978 948-2758, Cell 978 835-2573 or via email at email@example.com