Real estate pundits have always warned (and it's true) that real estate is local. One market may take off while another sits idly, its inventory aging. Not so today - literally all markets across the United States are seeing unprecedented lack of inventory coupled with a running-of-the-bulls deluge of anxious buyers.
Do you know what you need to do to get a house in today's market? Do you know that even if you do it, you still might not get the house. I just read a west coast friend's blog where she described receiving 35 offers for one of her new listings. As she said, "that's 34 disappointed buyers."
The most I have encountered lately is eight offers for a Glenview home - still a lot for one property.
The most common tactic right now with multiple offers is the use of the "escalation clause." This is simply a tactic where your offer states that you are willing to pay, say $1000 more than the highest offer. However, as more buyers catch on, it takes on a life of its own: $1001 more . . . or $1100 more . . . etc. Don't forget if you're doing this, it still has to appraise.
So what else can you do?
- be prepared financially by having your lender's pre-approval ready before you start looking
- try to take emotion out of the equation - think of the purchase strictly as a business deal (yes, I know we're talking about your "dream home" but getting too emotional makes it harder to recover if you lose out - or might evoke buyer's remorse if you get the house.)
- have your realtor provide comparables of recent sales to help you determine the fair market value.
- keep you offer as "clean" as possible - keep to the standard contingencies of an inspection and attorney approval, ask your lender if you can go without a mortgage contingency, and know that a house sale contingency will be rejected outright.
Don't give up - and if you do lose a desired home, take away something that will benefit you on the next go-round.
Filed under: Real Estate