A low housing supply has plagued many areas around the country. Inventories in many areas are expected to remain lean. Demographic trends portend strong demand as Baby Boomers reach their peak home buying years, and Echo Boomers become major players in the housing market. In a nutshell, if you’ve been battling competition to buy a home, you may face more of the same in 2005. Don’t be disheartened. Be prepared.
Educate yourself about the market. If you’re attempting to buy in an area where multiple offers are common, make sure you feel comfortable offering over the asking price, if necessary.
Look at everything that comes on the market in your price range that could possibly work for you. Be ready to act quickly. Read the purchase agreement that you will use in advance so that you understand what you’ll be singing. Confidence is your ally. So, do your research upfront.
There are times when you’ll have to drop what you’re doing and rise to the occasion. If you’re not willing to do this, don’t be disappointed if you’re not the winner. The winning buyers are committed to making it happen, regardless of the inconvenience.
Get preapproved for the mortgage you need before you start making offers. Proof that you’re a strong financial candidate will go along way to convincing a seller that you’re a good risk.
Offering a larger earnest money deposit than is typical might catch the seller’s attention. If you can be flexible on the closing, let the seller know. If you don’t need to take possession at right away, you may gain favor with a seller who needs to rent back after closing. Clean up your offer by eliminating needless contingencies.
As corny as it may sound, it can make a difference if sellers can mentally attach a real person to the offer they’re considering. Consider writing a personal letter to the sellers to tell them how much you love their home. Make sure that your agent asks to present your offer personally to the sellers. At the least, your agent should include a letter with your offer that let’s the sellers know something about you.
HOUSE HUNTING TIP: Prospective buyers who are continually being outbid in competition should do some soul searching before making another offer. Find out why you weren’t the winning bidder. Was it price, terms, or both? If you find that you are often the low bidder, perhaps you should be looking in a lower price range.
Another option is to change your house hunting parameters. If you’ve only been willing to look at Mediterranean-style homes, consider looking at any new listing that has character, regardless of the style. Or, you might broaden the geographical area so that you’re exposed to more listings.
In high-priced areas, consider including condominiums in your search. They tend to be less expensive than single-family residences in the same area. Condos used to be considered a poor second choice to single-family homes. But, in terms of appreciation, condos have outpaced single-family homes nationally for the past couple of years.
There has been some concern about speculative condo buying, so make sure that you buy into a condo complex that is predominantly owner-occupied. Also keep in mind that there’s no guarantee that condos will continue to appreciate at a break-neck pace. That’s why it’s wise, no matter what kind of home you buy, to buy for the long run.
THE CLOSING: Keep an eye on listings that don’t sell immediately. They may be overpriced, or they could need cosmetic improvements. Sometimes the best deals are made on properties that everyone else overlooks.
Dian Hymer is author of “House Hunting, The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide,” Chronicle Books.
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