This spring, every agent and homebuyer can tell stories about "the one that got away," the house (or houses) that sold out from under them days or hours before their offer paperwork was complete. Feedback from an agent on a recent listing contained only one comment, with a frowny-face emoticon: "Client missed out on multiple offers." The listing agent had cut off acceptance of new offers two days after the listing went live, and the house had sold almost immediately.
So much traditional advice about taking it slow, doing your research, driving by a few times at different hours of the day, trying to negotiate a better deal-- these are great ideas, but, if followed in a market like today's, end in missed opportunities. However, jumping into a huge purchase like a house can't be the right answer, can it?
Here is one blog article full of great advice of this kind-- "It's okay to make sure the price is right," and "Get a feel for the neighborhood"-- both tried and true principles-- but recent trends seem to beg the opposite advice. "Put your best offer first" and "Buy it now or lose it" and "Sell your house before you find the next one or another buyer will beat you to it" sound pretty risky, though. Is there a way to follow both types of recommendations?
Doing a bit of simple legwork before you feel ready to list your house and start looking at new ones may be the best way to correct for today's market. You might think your house just needs too much work before listing, and put off looking seriously into possible new areas until you are closer to being ready to sell. In the past, that would have worked fine. We all know friends, neighbors, and family members who have waited months for their property to receive a viable offer, and it's hard to wrap one's mind around the fact that conditions have changed dramatically for this new market. Best practices for homebuyers right now should include the following simple steps:
1. Call an agent today. Even if you feel you are months away from listing, a good agent can answer your questions about what to expect and tell you what projects will give you the most return on the inevitable cost. From an initial meeting-- which comes at no cost to you and no contract obligations for the future-- you can create a list that will help you count down to selling time. You might be ready sooner than you think, and at least you will have things lined up and ready to go if you find your dream property earlier than you think, too.
2. Choose your location(s). You aren't ready to put in an offer, but you can still narrow down your options. If you start deciding in advance just which neighborhoods to rule out/in, you will not be stuck doing research on schools, crime, insurance and property rates, etc. while someone else is writing an offer on the house you want a few months down the road.
3. Do your drive-bys. When you have narrowed down your ideal locations to a short list, take a few minutes each week to drive those areas at different times of the day-- take a different route to the grocery store, for instance, or from picking the kids up at school. You might see red flags that you didn't notice at first, and be able to narrow the possibilities further. Fewer options to consider will help you make a faster decision when the time comes.
4. Get prequalified now. Your agent can refer you to the right person, and the process is fairly streamlined now. You might feel like it is too early for this step also, but knowing your borrowing limits will prepare you to make your best offer quickly, beating out the competition for the house you will fall in love with down the road. We all like to bargain and negotiate a better deal, but in today's market, failing to put forward your best price from the beginning will likely doom your offer, as it did for the agent with the very sad feedback above. Frowny-face.
Posted by L. Lathrop, for Jim Burns