Real Estate
How to Buy A Home In A Competitive Market
More people are taking the leap to homeownership as a result of rising rent prices, job security, low interest rates and generous home loan programs. And that just might be your dilemma, that many people are doing this, and for good reason, but it might be making the market a bit more competitive. In areas where inventory is low, homes are being snatched up in a matter of days. To help you land the home you want, follow this guide to give you the edge in a competitive market.
Get a pre-approval letter. A pre-approval letter shows you’ve been vetted, you’re serious and you’re ready. This also gives you a realistic idea of how much of a mortgage you can afford so you can limit your search to houses in your price range before setting your sites on properties out of reach.
Make sure your agent gets the scoop. A good agent will find out the scope of interested parties in a house before writing an offer. Knowing how many people have seen it and written offers on it will tell you how aggressive you need to be. Knowing the seller’s story and timeline can also work to your advantage. Something that doesn’t match up with the sellers timeline might get rejected. It also lets us know in advance to start preparing for a bidding war.
Be flexible with timing. That being said, you can improve your chances of landing the home you want if sellers know that you are willing to work with their schedules in as quickly– or as slowly–a manner as necessary.
Make it personal. Real estate is a visual industry: you look at homes, you look at neighborhoods, you look at the numbers, sellers look at offers. All of this can get cold and impersonal. Consider adding a personal letter that shows why you love the house and what you plan to use it for. Some people with an emotional attachment to the home they’re selling may be inclined to sell it to someone they know will take care of it and appreciate it the way they did.
Pay more upfront. Money talks. You can beef up your offer by providing more money up front in your earnest money deposit. The cash works as insurance for the seller in case the buyer backs out of the deal. Knowing you have more skin in the game might make take your offer as the safe bet.
What your millennial might be crying about today.
It’s not because someone has left a hurtful comment on their latest selfie, or because their skinny jeans don’t fit anymore, but many millennials these days are having legitimate concern over their future, and where their future will take place geographically.
It’s no surprise that cities with most economic prospect draw residents from all over the country. You’re going to go where the jobs are, and where the money is. Young couples looking to buy a home, raise children and achieve the American Dream are facing a broad dilemma in California. Macro-economics teaches us that the cities with the least affordable housing often have the best social mobility. Inversely, cities with the most affordable housing have the worst social mobility. California is home to six of the seven least affordable housing markets, though has four of the 11 best cities for upward mobility and job opportunity, including Southern California, according to Kolko’s affordability metric. (Kolko/Chetty 2015)
High-income metros often have greater influence over planning commissions, and rightfully so at times. The coastal communities, for example, often deter and vote against new construction, as opposed to lower income metros. The unique thing about Southern California, is that may of these high-income metros and low-income metros, seem to live in symbiosis. The best advice to give your millennial seeking the American Dream? Uh, we’ll let you know when we find it. Until then, we’re open to suggestions.
Pocket Listing 101
Here’s what you need to know:
A pocket listing is a property for sale that is not listed on the MLS. These off-market properties carry unique benefits for buyers and sellers in today’s market.
Buyers may seek the help of a real estate professional in search of off-market properties, or properties that have yet to hit the market, in low-inventory markets. When inventory is low, buyers may find themselves in steep competition, and may grow tired of being outbid. Pocket listings allow for an added ease in buying a home, since there’s less competition and less stress.
For homeowners undergoing construction, or prior to construction, the decision to list your home as a pocket listing gives you the added benefit of early exposure without the stress of managing showings. Traditional marketing strategies strive to obtain as much interest in a home as possible. For high profile homeowners, implementing an off-market strategy to selling their home allows them to maintain privacy, allowing only qualified buyers to preview and tour the home.
Want to know more about pocket listings? Ask us how they might benefit you here.