How do you buy a house when everyone else wants a house, too?
You need an edge. In f act, you need a few of them. There are several, and if you employ all of them, you might just win the house you want even though there’s competition for it. Some of these you know but have ignored. And a couple may be new to you. In a housing market where prices and demand are high and inventory is low, you need every one of these.
One: Line up your financing before you go househunting. If you’re a cash buyer, a copy of a bank statement with the account numbers blacked out is your golden ticket. If you’re getting a mortgage, talk to a lender now. Compare closing costs and rates first, not later. The days of casual browsing and figuring out how to buy after you find your dream house are over. That dream house will be gone faster than you can say “bank pre-qual.”
Two: Get a local connection. That’s not just people you know who live in the area you like. That’s a Realtor. The Internet can do a lot of things but what it can’t do is replace a local professional who knows the market where you want to live. I’ve sold more than one house before it went on the market. I knew the sellers wanted to sell, and buyers came along who were a perfect fit before it ever hit the Internet.
Three: Your obsessive scrolling of the Internet is a good thing. Stay on top of what’s for sale. Even the very best Realtor won’t be able to match that middle of the night real estate porn scrolling you do. You know you do it. You don’t have to apologize.
Four: Be aggressive. You’ve found the house. You’re excited. The price isn’t totally insane. In an ordinary world, you’d think about it for a day or two. You don’t want to be hasty. But this is not an ordinary world. If you think it’s a great house, you can be sure at least two or three other buyers are thinking the same thing. Make an offer. Put contingencies for inspection and other ordinary safeguards in, but make an offer. You can’t win if you aren’t in the game.
Five: Be realistic. I wish we priced homes the way they do in Scotland. There, they set a price that is the very least a seller will take, and then invite offers over that amount. In the U.S., we set a price and everyone assumes the seller will take a little less. Your inner horse trader will try to take over when you make an offer. You’re going to want to get the best deal possible. Don’t go overboard. This is not a buyers’ market, and you have very few cards to play. If the price seems fair, offer the asking price. You can usually renegotiate if you find a major issue during inspection, and sellers are more willing to hear price adjustments based on real problems. Try to get a bargain right up front and you’ll probably lose out.
Six: Be accommodating. One way to set yourself apart from the competition is to let the seller know you can accommodate them if they need a little time. If you have a place to live and they’re not sure where they’re moving, this is something you can afford to offer. It can be very appealing to a seller to know you’ll be understanding if they can’t close quickly. They’re about to become buyers and you know what that’s like.
Seven: Be reasonable. An inspector’s job is to find problems. Any house will have some. But if you nitpick every item the inspector finds, you’re going to not only offend the seller, but you might jeopardize your sale. A full price offer that suddenly includes demands to fix every electrical outlet or repair every window isn’t nearly as appealing as an offer that doesn’t sweat the details. If the foundation is good, the roof is good, and systems are sound, count your blessings and keep your mouth shut. If you don’t, there’s probably someone else with a backup offer who’s going to suddenly look a lot more promising than you. They might even pay more than you will. And if you can’t do that, perhaps you need to look at a different kind of house. New construction, perhaps.
Eight: Be resilient. It may take two or even three heartbreaks before you get a house in this market. Many buyers ignore one or more of these tips, and lose. But they learn. And when you finally close on your new home, you’ll also have some very valuable skills to share when your friends tell you they’re ready to buy a house.