“Inventory Shortage” Real estate jargon that causes unnecessary anxiety in the market, affecting both Buyers and Sellers who are selling to buy.
“Rising Interest Rates” Yes, but, they’re still historically low and nowhere near 6% or 8%, or 18% as they reached in October of 1981.
It’s a Smart Buyer’s Market in reality … if you let it be. The surest path to success is to set your sights ahead of the market pace. Not with a Crystal Ball phone app or Theresa Caputo as your agent, but by having realistic expectations.
Your budget is bracketed by your ideal payment on the low end and your max loan qualification on the high end. Your home search criteria are often inversely related to that, with your expectations greatly exceeding your idyllic budget. Compromise on some combination of price, location, floor plan, lot size, and the home’s features and amenities is almost always necessary.
Don’t set your budget based on your current house payment or rent.
Don’t set your expectations based on a TV (un)Reality Show or a pin board.
Here are a few tips for a successful home search and offer negotiations:
- Plan your home tour for Tuesday afternoon through Friday morning. This is the timeframe when many new listings come on the market and overlaps with when the fewest Buyers are out looking. If you wait until Saturday, you’re likely to find yourself competing against another Buyer’s offer or disappointed that the home you most want to see is already under contract.
- Be pre-approved, not just pre-qualified. Your loan letter should accurately reflect your qualifications, including price and loan type, and that your credit has been reviewed. A letter from your lender, dated the day of your offer, for an amount that exactly matches your offer price, is virtually meaningless to a Seller who has the counsel of an experienced REALTOR®.
- If you think you’ve found the right home, then there’s another Buyer who feels the same way. Time is of the essence. Acting quickly is not synonymous with acting rashly. Sometimes the first house that you look at truly is the right home for you.
- Listen to your REALTOR®’s advice about your offer price, based on the comprehensive CMA: Comparative Market Analysis that they’ve prepared for you. A full price offer may be perfectly in line with the market.
- Reduce or eliminate asking that the Seller pay your loan closing costs. If you don’t have funds to cover these costs, your loan officer may offer a lender-paid closing cost option that only increases your mortgage interest rate slightly.
- Pay for your own one-year home warranty, but don’t forego it. These warranties are a valuable, and economical, additional insurance coverage for your home.
- Be flexible on your contract dates. If you can, align your closing date with the Seller’s ideal date. Keep your contingency dates short – 10 days for Due Diligence and 21 days for Financing & Appraisal.
- In multiple offer situations, consider offering 1% above the CMA price. The CMA provides not an exact market price, but a price that generally falls in a range of +/- 3%.
- If you are making an offer subject to the sale of your current home, you will be in a stronger negotiating position if your current home is under contract.
For questions or comments, or to start your Northern Utah home search today, please contact me. I’m never too busy for you or your referrals! Call or Text (801) 726-1443 or email me at firstname.lastname@example.org.
Kim Novak, Principal Broker & Owner l Novak Advantage Real Estate – A Veteran Owned and Operated Local Business I 3636 N 2900 E, Layton, UT 84040 I (801) 726-1443 I email@example.com