10 Tips 4 Surviving A Competitive Housing Market

It's tough out there...

With the current available inventory at all time lows, homes in certain price ranges are only lasting a number of days/hours and multiple offer competition is a guarantee. How do you compete in a multiple offer scenario on a set budget and how do you make your offer the most compelling?

 

1. Get a local agent.

If your agent does not understand where to look and how pro-active they need to be in this market and able to quickly communicate with you then they are the weakest link in your armor. Find someone who has worked this multiple offer zoo before and ask for recommendations within offices. You need an agent who loves to compete and enjoys the hunt.

2. Lower your expectations to give you more flexibility to wrestle.

If you are putting in your highest and best at the top of your budget and other people can simply go higher then you've lost already. You may need to shoot for something 10-20 thousand below your budget if the offers are regularly escalating up that fast.

3. Don't be afraid to put in multiple offers.

Find an agent who is an offer writing machine and a lender who understands the urgency. Don't just settle on one home and hope for the best. Have offers on a few houses out there and an agent who can follow up like crazy. You can always rescind the other offers if you win one and the seller will just go on to the next buyer. If you have put in an offer early and it's already been beat out simply revise and submit another offer. Have a lender ready to go with pre-approval letters, even to make a call to the agent if needed to verify their speed and ability to get the loan closed.

4. Get your loan through the underwriting process. 

Very few places do this but it is becoming more common where your loan can already have gone through the underwriting process. This is more powerful than a pre-approval letter and 2nd place to a cash buyer.  

5. Increase the cash where you can.

When sellers look at an offer it is really a layout of where your cash lies. If the price offered is high but the earnest money and money down are low then that signals that you have good credit but no available cash and the seller may view that as a riskier offer than say someone who plans to wager a lot of earnest money. And just based on the order of where the numbers fall in the contract increasing earnest money is psychologically more important than increasing your money you plan to putting down on the loan. Earnest money amount is on the first page of a contract and the money down is buried a couple pages deep. 

6. Reduce seller costs.

The top offers always seem to find a way to not request buyer's closing costs. Most sellers and agents aren't dumb. If you offer $300,000 but request 3% in closing costs to be paid by the seller that is really an offer of $291,000.  Take it or leave it a $9000 is a big gap to fill if someone else is able to cover their own closing costs. This may mean you need to save some more cash if you currently cannot pay for your closing costs.

7. Reduce sale timelines.

Once an offer is accepted, an inspection and appraisal need to occur which can lengthen the time that the sale is in progress. In a competitive market having an inspector ready to go at a moments notice can decrease the turn around time for inspection and appraisal. I have even witnessed inspections quickly going on at the same time a buyer is viewing the home for the same time so that a buyer can put in an offer without an inspection period. With loans that have already undergone the underwriting process buyers can request dates to close quicker than an average person who still has to get financing approved. 

8. Play to their emotions.

Write a letter talking about how much you love the home. Just know that legally a buyer's agent cannot write the letter for you or tell you what to put in the letter as we cannot be involved in anything that would classify as attempting to promote or restrict a protected class. Buyers still submit offers with letters but as an agent representing the seller I would strongly advise my clients to absolutely NOT read the letter, it is however up to them. Some sellers do read the letters when the offers are close and sometimes it is the only thing that sways an offer. 

9. Knock on some doors.

If you can't find a house on the market maybe you and your agent can find a house not yet on the market. Knock on the doors in a neighborhood you desire and maybe leave a letter explaining that you are pre-approved and love this neighborhood and if anyone was looking to sell their home they would love to be the first to make an offer on it. Be open and honest and let them know how high you were willing to offer on homes in that neighborhood and that you would love to pay the market value for this one. Your agent would love to do it with you or has probably already been sending out mailers to see if anyone has been thinking about it. You may find an owner happy to save you all money because they didn't have to go through the hassle of marketing the home to find a buyer. Lots of homes are rentals so send some letters to rental owners. Your awesome agent can help you with this. 

10. Be in backup.

If you lost out on an offer, ask to be in a backup position. Life happens to people and this is mostly a game of luck so up your odds by being in backup and essentially being first call when things go south with buyer number 1. You can be in backup position on a number of homes and still shop.

 

Sacrifices must be made if you want to save for a home!

I live where marijuana is legal and I am putting this out there because I know it is click bait for all the pro-smokers out there until they realize I’m not anti-weed I’m just trying to promote budgetary responsibility.  As a realtor, I was fascinated about the legalization process of our wonderful state of WA and with a pot shop popping up in every town the red tape was certainly intriguing to watch. But when I work with families that say they want to save for a home…there are some small lifestyle changes that can expedite the process. 

Washingtonians will say, “Take my guns! But don’t you dare touch my coffee or my weed!” I wish I were being dramatic but we are sort of liberal around here and the more rural you go you can’t touch guns, coffee or weed. Which shows that we’re more the same than we are different. :-) 

WA has one of the biggest home shortages in the nation. Rentals and new construction can’t keep up. People are desperate for homes and making desperate purchases. Desperate times call for desperate measures and I am going to touch your coffee and your weed…hold my beer.

Click to find out the answer to….

How much does the average person spend on MaryJane?

Now if you are a couple…(that I personally know)…it sifts out to about $50 a visit and up to $300 a month. $300 A MONTH LITERALLY UP IN SMOKE!  

How much does the average person spend on Starbucks?

And that is on the low end for some people.

So now that you feel violated after I touched both your coffee and your weed. If you are working together as a team you will need to make sacrifices as a team. If you want to find $500 a month or more maybe giving up your fixes whatever they may be can help fix your future living situation. Just keep telling yourself it is temporary. This too shall pass. And if you need a realtor that is not afraid to tell you to sacrifice that which you hold most dear 2nd only to your children…give me a call. Varaia Roshon 253-448-5765 Proudly serving the S. Puget Sound area for all your real estate needs with a good sense of sarcasm and humor.

Happy New Year!

In 2018 loan limits are increasing which in some counties are a much needed blessing where inventory is tight and the housing market is intense. But do you know what the best way to increase your loan limit is? Your credit score. Better credit is the true gift that keeps on giving. 

I am by no means a financial advisor, just merely a common sense money miser. 

1. Order your free annual credit report www.annualcreditreport.com. DO NOT I REPEAT, DO NOT sign up for a credit score monitoring mumbo jumbo program that guesses at your score. Get the hard copy in your hands. 

2. Look at the damage, find the culprits and systematically exterminate them. A highlighter of your favorite color helps.  

3. Dedicate a morning or entire day to make phone calls, send letters and emails to debtors to correct, challenge or work out payment plans. 

4. Wait. Sometimes a bad mark on credit can only be cured with time. After a few years (7) it simply falls off the report. Check the dates and see if a major culprit is about to get kicked off the report soon. If you are home shopping waiting till after that event occurs could be incredibly helpful.

5. Not enough credit history? Take out a credit card with lowest interest rate possible and only spend 30% of the balance and PAY IT OFF COMPLETELY every month. If you do a good job they'll keep raising your limit to entice you to use more credit...be careful.  

You're Welcome! Have an excellent 2018! Call me if you need anything. 253-448-5765