Freaking out because you need or want to move but this housing market has you thinking you are stuck forever? Let’s talk about some ways you can get what you want.
Let’s start by getting this one statement out of the way: being a buyer in this housing market is tough. I’m not going to sugar coat it; it can be brutal out there. However, it’s not impossible to secure a home. Let me explain why.
Don’t Let Sellers Scare You
First of all, sellers can actually be quite greedy right now, but you shouldn’t let them scare you. 😉 If you are educated on the comps in this market and you feel that certain homes are overpriced, then odds are, you are probably right. But being educated is the key. It’s easy to see the home prices nowadays and just turn away aghast. People who have been shopping for a while or have simply just been paying attention, though, will realize that prices have definitely skyrocketed over the last few years. So, prices are high. It is what it is. No amount of complaining will lower them. However, some homes are definitely overpriced. Because prices are high, many sellers think they can over-price the already inflated prices, even when their homes are seriously outdated or in need of some TLC. Does that mean they will get that price? Not necessarily. On average, we see 50-80 price reductions daily, and over half of those price reductions are in Macomb, Wayne, and Oakland county. A home is only worth what a buyer is willing to pay for it. So if it looks ridiculous, then you can probably count on a price reduction at some point. Just because a seller lists at a certain price, does not mean you need to pay that price. I’ve seen people get contracts accepted UNDER asking. 😱 Yes, under asking in this market. We also have an agent at the office who was able to get seller concessions for his buyer last week. Are there over-priced homes that are still flying off the market? Yes. But not as many as you would think.
Don’t Let the Other Buyers Scare You
Second, you can be a competitor! Don’t let the competition scare you. Everyone has heard stories of homes flying off the market before they even hit the market, which prevents some buyers from trying because they think they’ve lost before they’ve even started. However, I’ve been tabulating the data for the entire month of February. What I know is that only 40% of homes in Macomb, Oakland, and Wayne county go under contract in under 10 days. 30% of homes take 15-30 days to go under contract, and the remaining 30% take over a month! So what does that mean? Well, you might lose out on 40% of homes that become available each day, but that leaves you with the remaining 60% that you have a decent shot to purchase. What do those percentages look like in numbers? Well for February, we’ve had an average of 162 homes come on the market each day in the tri-county area. Of those homes, an average of 104 were listed under $300k. So when you break down the data, it doesn’t seem so daunting. Is the competition strong? Absolutely yes. But don’t let it count you out of the game because it’s not as bad as it seems.
Now obviously, some cities and price points are much more competitive than others. Certain markets are much easier to get into, while others require very aggressive action on the part of the buyer. So if you are in a highly competitive market, what does aggression look like?
Speed Is Key
Aggression looks like speed. If you or your agent find a house you like, you have to move forward asap. Unfortunately, there’s no time for long drawn out decisions. There’s no time to bring every single family member over several days to tour the home and give their opinion. If you can’t physically view the home yourself, have your agent go in your stead and record it or Facetime you. You can even write and submit an offer before you see the home just in case sellers aren’t doing a highest and best deadline and are instead just choosing the first one that pops in or the first one they like. Doing this will basically just secure your spot in line and then you can view the home. You can even do this if you can’t personally view the home within the first three or four days. Write an offer, and then if it is accepted, you can use your due diligence period to view the home and decide if you actually want it or not. The key is to get the property locked in a contract. You’ll have your inspection period to back out if you need/want to. And please don’t feel like this is a “shady” move that you are pulling on the sellers. I promise you they will have a handful of other offers if you back out. This is a competition here, so you have to be aggressive if you want to win.
Attractively Written Offers are Key
Aggression also looks like an attractive offer. Many buyers assume they are counted out because they can’t make an all cash offer. Are there many cash buyers out there? Yes. But the majority of people still need a mortgage. So please don’t hold back on an offer just because you need a mortgage (even if you need an FHA mortgage). Would sellers like an all cash offer? Yes, because then they can skip the appraisal and all the anxiety that comes with it. However, just because they want a cash offer doesn’t mean they will get it. You do, though, need to offer over asking if the house is a hot house (meaning you can either anticipate or actually observe high competition). If you have the money, make the higher offer. You can’t afford to low ball in this market. Even though a good listing agent will call everyone who submitted an offer and ask if they’d like to beat the best offer they received, many won’t do that. So don’t wait for a counter or for the agent to come begging you for more money. Just offer the money up front. An attractive offer also looks like giving the sellers what they need and want. If they need occupancy, offer it. If they want to keep all of their appliances, let them. Another way to make an offer attractive is to lessen the contingencies. So, if you already own a home, sell it first so that your new mortgage that is contingent on the sale of your house is no longer contingent. If you are a first time home buyer, this contingency isn’t even there, so you have a leg up. Just eliminate as many of the moving parts as you can so that your offer seems “easy.”
So, if you really want or need to move, get in the game. The game is intense and you might be a huge underdog, but underdogs win all the time. 😉 You just might need to adjust your game plan.