If You Come to this Buying Party, Bring Good Appetizers (or What it Takes to Buy a House Today)

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 runningbulls-bmplistings.  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.




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