This summer has been the hottest housing market in almost seven years, according to the U.S. Census Bureau, which reported that new construction grew at an annual rate of 6.9 percent in June of 2012. In addition, home prices rose for the first time in seven months, according to the Home Price Index, and homes in pending status rose 9.5 percent from June 2011 to 2012, according to the National Association of Realtors.
This supports what I have discussed in a previous column: That multiple offers are back, and can cause buyers to pay more than they would prefer, and could lead to overlooking potential problems. If you find yourself in a multiple-offer situation, donÍt give in to the pressure to increase your offer to more than youÍre willing to pay, or rush to purchase without bringing in an inspector.
When a buyer first walks into a property and gets emotionally involved with it, whether it’s because of the low price or because it’s the “dream home” they always wanted, it can be frustrating to find out that there might be other offers on the table, especially for first-time buyers. Remember, you may not be the only prospective buyer looking at the property, but everyone who looks will not place an offer to purchase it.
Don’t panic and give in to your impulses to offer more than your realtor suggests. That’s how many buyers get into trouble. Trust your realtor: We are the professionals who know the marketplace. And if you feel anxious seeing activity on a home you like, remember that the other buyers are feeling the same anxiety you’re feeling.
On the flip side of seeing a home with a lot of activity, if you fall in love with a “new” listing, don’t hold off on making an offer in the hopes that the price will go down. You could lose to another buyer, or have to compete with one, forcing you to start out at a higher offer than you would have if you had moved more quickly. Don’t hesitate! In case you find yourself in that situation, you’ll want to have your financing in place beforehand. DO NOT “guess-timate” what you’re able to spend. Use real numbers and be honest with yourself about how high you’re able to go.
Avoid overpaying for a home whenever possible. What I mean to say is, if you find yourself in a multiple-offer situation, or a highest-and-best offer negotiation, stick to your guns and do not give in to the pressure of increasing your offer to higher than you are willing or able to pay.
If you know what type of home you are looking for, have your realtor set up a computer search that sends listings to you automatically via e-mail, giving you instant access to the latest properties available. If you see a home that meets your needs, don’t delay: Call your agent and go see it ASAP. Most realtors work seven days a week and we show properties day and night!
So many buyers are dragging their feet in the belief that the real estate market is still slow, and they may not be 100 percent sure about a particular property. It doesn’t cost a penny to look at properties, so see 10 or 15 before you make your decision, and see them as quickly as possible.
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