For most home buyers, “winning” means getting the right property at the right price at the right terms. The housing market in Central Kentucky, particularly in Lexington and Georgetown is HOT. Homes under $200,000 and homes in highly desirable neighborhoods are selling within days – sometimes hours – often with multiple offers. The days of starting with a low-ball offer and negotiating back and forth to a great deal for the buyer are over, at least for the most desirable properties and price points. How can a buyer win in this sellers’ market?
1. Track the market so you know when new properties come on the market.
2. Know the market so you don’t overpay.
3. Know how much house you can afford and want to buy.
4. See the property as soon as you can.
5. Get your offer in quickly.
6. Make your offer as competitive as possible.
7. Keep calm and be flexible.
One of the best ways to win is to use a local REALTOR. Yes, I’m a REALTOR, so “of course” I would say that. But read on and see if you agree.
1. Track the market so you know when new properties come on the market. Your REALTOR can set up search alerts that notify you when a new property comes on the market. Sure, you can also use Zillow, but Zillow is not always accurate (I recently got a bunch of requests through Zillow to see a new property with 5 acres, a house and a barn “listed” at $150,000; the actual price was $495,000). REALTORS have access to the Multiple Listing Service (MLS), the source of new listings, so our information is current and correct. Also, REALTORS often know of homes that might be coming on the market soon.
2. Know the market so you don’t overpay. The current market can create a feeding frenzy for the most desirable properties. But just because the price gets jacked up doesn’t mean the house is worth that much money. If you are planning to remain in the new house for 5 years or more, you might be comfortable with overpaying a little. If you are getting a mortgage, however, your lender will require that your property must appraise for at least the amount you’re borrowing. A local REALTOR can research the market and tell you how much the house is worth in today’s market.
3. Know how much house you can afford and want to buy. In this market, your offer must be accompanied by a preapproval letter to be competitive. But it’s also important for you to know (a) how much house you can afford and (b) how much of a mortgage you’re willing to get. Your REALTOR can give you the names of trusted loan officers who can preapprove you and will work hard to help you close on the right house.
4. See the property as soon as you can. In this market, you can’t wait for a “good time” to see a house. You might have to take off work or reschedule dinner plans. Even waiting until the next day can be waiting too long. Make sure you choose a REALTOR who can get you in to see houses quickly.
5. Get your offer in quickly. Don’t ever make an offer until you’re sure you want to buy, but understand that if you take too much time to think it over, you may lose your opportunity to buy the current property. Your REALTOR has all the documents you need to sign and knows how to structure the offer so that your needs are met and your interests are protected. Make sure your REALTOR also uses electronic signatures so that you can make offers quickly when necessary.
6. Make your offer as competitive as possible. Your REALTOR will advise you on how to put together the best possible offer, given your individual situation. Sellers will be looking for offers that look “serious” and that are most likely to close. Price is not always the deciding factor. Sellers will be looking at how much earnest money you’re putting down, what kind of loan you’re getting and how much of a down payment you have, whether you are preapproved, when you want to close, how many contingencies you have. I always recommend including an appraisal contingency and an inspection contingency. Another common contingency is the sale of a home. Many potential buyers are reluctant to put their house on the market because they don’t want to be “homeless.” This is absolutely understandable, but in a sellers’ market, having a house to sell puts buyers at a disadvantage.
7. Keep calm and be flexible. Buying a home can be an emotional process, and it can trigger fears in buyers and sellers that the other side is trying to take advantage of them. Using the right REALTOR can alleviate the tension. It’s important to have a REALTOR who will remain calm in the midst of chaos, keeping an eye on the prize . . . getting you the house you want at the right price and at the right terms.