Top Tips for Buying in a Hot Market!
by Scott Erickson, Owner/Broker/President, Century 21 Action, Inc.
The current real estate market is Red Hot and taking advantage of this opportunity is something that most people have at least considered. With over 50 years in the local real estate market at Century 21 Action, we have some advice to share for these market conditions.
If you are in the market for a new home you have likely been scouring the listings nearly everyday. You have undoubtly seen that most listings are "Going Under Contract" or "Pending" within the first several days of hitting the market. It makes the home buying experience challenging. If you're ready to pull the trigger on a new property, be prepared to line up a showing through your Buyer Agent as quickly as possible. Many property types are getting over a dozen showings the first day on the market with offers coming in by that evening. If a personal showing isn't possible you might consider a virtual showing through your agent, and while this trend is becoming very popular, some people just aren't comfortable with making an offer without stepping into the property themselves. Decide your own comfort level and needs; there are not any right or wrong answers.
As mentioned above, many properties are getting multiple offers within the first 24 hours. If you're ready to buy, make sure you have your ducks in a row ahead of time so when you find the next dream home nothing is slowing you down. Getting a pre-approval letter from your lender can help your offer standout; not presenting a pre-approval letter with your offer could cause the seller to select a different offer. Make sure you're mentally prepared to make a quick offer, it can create little anxiety if feel like you're under pressure to move fast and didn't prepare yourself for that scenario.
In a hot market with multiple offer situations, it's important to keep your offer as attractive to the seller as possible. Extra contingencies, longer closing times, lower Due Diligence Fees or Earnest Money deposits, requesting seller concessions, etc. could cause your offer to be set aside over other offers.
It's very possible that the seller could be in a multiple offer situation, and some may be for better terms (and price). Seller's are only allowed to "counteroffer" one offer/buyer at a time. Although the seller could ask every buyer's Highest and Best offer before making a decision, but they may not give everyone that opportunity if one of the first offers was a standout. Be prepared to make your best offer, your first offer. You may not get a second chance to improve it and it may prevent a bidding war if your offer is the standout. Keep in mind that your best offer could mean offering more than the listing price; decide based on your comfort level for the property at hand.
LOW INVENTORY/INCREASING PRICES:
The local market is experiencing one of the lowest listing inventories in a very long time. Meanwhile both listing prices and especially construction prices have been rising fast. Our local markets, and most of the nation, is experiencing a housing shortage; both for sale and for lease. How long this will last is honestly anyone's guess. Waiting to buy could mean paying more for a similar house later. Waiting to buy could mean settling for a smaller house for the same price. Waiting to buy could mean higher interest rates. Not getting your offer accepted on the current house you've found could result in the above scenarios forcing themselves upon you with the next one.
HIRE THE RIGHT AGENT:
In southeastern North Carolina it often joked that there are more real estate agents than grains of sand on the beach. Picking the right agent is not an easy task, especially considering that about 20% of the agents conduct about 80% of the business. When selecting a Buyer Agent for you and your property ensure the following:
- How much experience do they, and their firm, have your property type and location.
- Do they, and their firm, have extensive local knowledge and experience in your specific market area to help you avoid any legal pitfalls or disclosure issues.
- Does the agent have good expertise working the buyer side of transactions (versus the seller side...more below).
- Education, Qualifications, Awards, and ongoing training are important in this quickly changing industry.
In today's market it is becoming less and less common that a single agent handles both "sides" of the transaction. Buyer's enlist a Buyer's Agent representing their unique needs and Seller's hire a Listing Agent to represent their unique needs. Although many agents are experienced and properly trained for handling either side of the transaction, but when a single agent handles both sides of the same transaction, both parties lose that agent's negotiation skills on their behalf because they can't legally negotiate for both. Keep in mind, contacting the Listing agent about a property you're interested in is not typically a buyer's best move.
With a hot market, an experienced real agent is even more important than ever. Experience = Knowledge, Expertise, Integrity, Cool Head, Consulting, Honesty, Education and Training beyond a license course. A well trained local agent can save their clients countless headaches, thousands of dollars, and lots of frustration that could have been avoided. At Century 21 Action we are known as the training and education firm, we are known for our quality agents, we are known for our Top Producers.
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About the Author: Scott Erickson is the Owner, Broker In Charge, and President of Century 21 Action, Inc. Scott has been practicing in real estate for over 26 years with extensive experience in all form and types of real estate sales, real estate training and consulting, vacation rental management, property management, and seminar speaker and panelist. He has earned the following professional designations, Certified Real Estate Brokerage Manager, Certified Residential Specialist, Accredited Buyer Representative, Accredited Buyer Representative Manager, Recreational and Resort Specialist, Resort Rating Specialist, e-Pro, and REALTOR. He graduated from the University of North Carolina in 1997 with a double major in Marketing and Management. Century 21 Action, Inc. has been a multi-year Quality Service Award winning office.