I went house hunting last weekend with my daughter and her fiancé, who are moving from Texas to Colorado next month.
Even for this seasoned home hunter, the experience was humbling. In more than three decades of going in and out of the housing market, he’s never seen so many disappointing, overpriced homes selling above asking price in the time it takes him to say new paint.
Last weekend we toured 12 houses. At the end of the weekend, everyone had a contract, including the one they offered and didn’t get.
Now this is where I need to pause to inhale smelling salts. On the house they liked, the one that made their hearts beat a little faster, they made a cash offer of $15,000 over the asking price. Now, you’d think that would get the seller’s attention. But instead, the listing agent texted his agent saying the offer “isn’t appealing.”
not appeal? What kind of world is this?
She expected higher offers with a longer rental. (The seller wants to live in the house for five months free of charge after it closes.) The house sold for $100,000 without asking for it. You think I’m kidding. I wish I was.
“Not even a counter offer?” I asked the agent in disbelief. No. Not in today’s market. Sellers receive a dozen offers and choose the one they like best.
And so it is in the harsh world of home buying. You start with a wish list and keep lowering the bar. In this case, my daughter and her fiancé want a decent kitchen with a counter to accommodate stools, no more than a 20-minute drive to work, a fenced-in yard for their two dogs, a garage big enough for their truck, a small curb appeal, a bit of charm, a walkable neighborhood. And while they’re willing to make some improvements, they don’t want to add a remodel on top of two new jobs and a new marriage in a new state.
However, as we toured the homes for sale, the word that came to mind was a word I hate: settle. Well, if they replace the dated light fixtures, worn and stained carpet, and circa-1970 laminate counters, then maybe they could overlook the fact that the house faces the interstate and the basement smells of damp earth.
If you’re looking for a new home, here are some hard tips from experienced real estate agents:
• Don’t expect a deal. Don’t expect to buy the house for much less than the asking price or expect the buyer to reduce the price to allow for needed repairs.
• Make your best offer first. Surprisingly, you may not get a chance to trade. Stories of multiple offers within 24 hours of a home being listed are real and happening all over the country.
• Come with proof of financing. If you can exchange all the cash, do so. The next best thing is to bring as much cash to the table as possible. If you are financing the purchase, have a pre-approval letter from a mortgage lender who has verified your finances and credit.
• Buy houses a little below your budget. Not only does this allow you to offer more than you ask for, but it will also leave some funds for improvements, which you will probably have to do.
• Get a great agent. At no other time in your life are you likely to spend more money in less time than buying a home. When making such a significant investment, you want to work with someone who knows the neighborhoods you’re looking in, has good relationships with other agents, gets advice on homes that are about to come on the market, is a creative negotiator, and can act. promptly in your best interest.
• Arm yourself with courage. Keep a cool head when bidding and negotiating to avoid making poor financial decisions due to desperation and emotions.
• Eliminate contingencies. The more contingencies buyers include in their offers, the more likely sellers are to reject them. After securing financing, passing a home inspection and getting an appraisal are the next big hurdles. While an inspection is important to buyers, in some markets buyers are willing to tell sellers that they will give up all but the most important aspects. Because appraised prices are often below market prices, if homes are selling at record highs, some homes will not be appraised for sale price, meaning the loan may not go through. If buyers can show they have the cash on hand to bridge the gap between the appraisal and the contracted purchase price, that’s a plus.
• Offer more than money. Find out what besides price matters to sellers. Maybe they want a quick closing or a flexible move-in date or rent return period. Some nostalgic sellers favor buyers who promise to appreciate their homes as much as they have. Buyers who let sellers know they share the owner’s love for the home stand to gain.
Marni Jameson is the author of six books on home and lifestyle. get to her in marnijameson.com.