Rule 1: Select an Experienced REALTOR® before you even start your search!
To be competitive in today’s market, you need to be prepared. Select an Experienced REALTOR® to educate and guide you through the process before you even start. There are so many important strategies, systems, tools, contract issues and decisions to be made.
A face to face discovery and strategy meeting is a must. The internet and lazy agents have done a great job convincing the public that with all the online apps, they can do this on their own and call an agent to write it up. This leads to offer after offer being rejected, disappointment, distrust and frustration are the usual result.
Seek out the right Experienced REALTOR®
Rule 2: In today’s market, you need to be fully underwritten for your loan!
Fully underwritten for your loan means that that you and your loan are approved subject only to the properties appraised value and clear title. Also, your offer with a fully underwritten loan can close quicker. Sellers looking at multiple offers will always pick the surest thing.
A pre-approval letter is often usually based on a phone call and a preliminary check of your credit score, nothing more. These days, with homes selling so quickly, a pre-approval letter is no guarantee that the buyer qualifies for a loan and in most multiple offer situations it may be the reason they discard your offer.
Rule 3: A better technique to search for and find the best homes quickly!
There really is a better technique for searching and finding the best homes quickly. An Experienced REALTOR® will use that it to find your next home. Daily communication, the right search parameters, and the use of the NWMLS Portal is by far the best way to manage your property search.
Your REALTOR® should be in communication with you daily to ensure that you see right properties. The property search, your selected properties, and appointments to see the homes are all built into the Portal system. This may allow for us to be the first offer, give time for a pe-offer inspection or if there is an offer review date, have time to ensure that your offer is competitive.
Rule 4: Understand winning offer strategies!
Without the right guidance, price, terms, and contingencies can be very confusing in a Seller’s Market. You should not have to lose out on three or four homes before you get it right. We already discussed that there is low inventory of homes for sale, and that they are selling quickly. Obviously, sellers are accepting the offer with the cleanest terms and most likely the highest price.
An Experienced REALTOR® will know how to package your offer in a way that gives you the best chance of acceptance. They will discuss purchase price, down payment, earnest money deposit, closing date, and other contingencies which are all in your control. Of course, you make the final decisions but ask yourself.
“what will it mean to me if I lose the opportunity to move into this home?”
Rule 5: Can you overpay for a home in an appreciating market?
Agents and sellers have been realistic at selecting listing prices. The SOLD price for most homes is higher than the list price. We have seen an average of 3% over the list price in most markets. After seeing a CMA for the home, follow the REALTORS® recommendations.
In an appreciating market, paying too much for a home is a minor risk. In most situations, properties are appraising at offer price. However, if the appraisal is low, the NWMLS financing addendum gives the Buyer an opportunity to renegotiate or rescind their offer. If the appraisal comes up short and you still want the home, you will have to add more cash to the deal to make up the difference.
Future listing prices will always be based on your SOLD price.
Bonus Rule: Is it wise to wait till next year?
Interest rates are at a record low. 3.5% is a gift! We have seen approximately 10% appreciation on most neighborhoods this year. Is it wise to wait till next year to restart your home search? When will the pandemic is over and will more homes come on the market and bring lower prices? Will prices increase with the thousands of new tech jobs coming the Eastside? Trying to predict the market is nuts.
Look at what can happen. An interest rate increase of 1% and appreciation 5% next year that will mean with your current loan approval you will lose 15% or more of your buying power. If you are looking at $700,000 homes today, with a potential 15% loss, next year you will be looking at the homes priced at $600,000 today. Is that what you really want?
Of course, if interest rates remain the same and values drop 5% you win!
Trying to predict the market is nuts.
Check REX2020.com for more blog posts and information about my proven Seller and Buyer systems. This information is valuable and timely for today’s real estate market. Let me know if you have been thinking about a move … it may be time to start planning.
You can see my step by step guides for both Sellers and Buyers based on the current market and proven by my years of experience. These guides are FREE for everyone that meets with me to discuss their needs and expectations. Whether it’s time to buy now or in the future, you will receive options that will help you to put a plan of action in place. Contact Tom Directly