Swimming With the Sharks

shark-infested-waters

The Colorado Front Range housing market has been making headlines.  If you’re a home shopper, put on your protective gear and get ready to swim with the sharks.  Inventory levels of available homes are low, which means nearly every property is receiving MULTIPLE offers (most well over asking price) within hours of the property hitting the market.

Getting your offer reviewed, much less accepted requires aggressive action on the part of the buying team:  You, your Realtor and your Lender.  Here are some key points to consider:

  • Time:  Make sure your agent has you on an MLS automatic notification system.  When a property hits the market that meets your needs, call your agent and RUN!  Gone are the days of leisurely saving your property shopping for the weekend, then taking a couple of days to “think about it.”  Most properties are being sold within 48 hours.  Go, dog, go!
  • Location:  If you need something now, think about expanding your possible home location.  Being able to cast a wider net in this market could make a big difference.  Could you add a few more minutes to your daily commute?  Is there a larger area within a particular school district?  Creativity and flexibility wins the day.
  • Money:  Are you pre-approved for a mortgage?  Most listing agents won’t even accept an offer today unless it’s accompanied by a letter from your Lender saying that you’re pre-approved.  Some agents are requiring you to get pre-approved by (or even use) their selected lender!  Before you grumble too much, think about it from the listing agent’s perspective: they are going to receive 20 offers on a property.  Which one is in the best interest of their seller?  The one that has the best chance of closing.  Knowing an offer isn’t going to “fall apart” due to financing issues three weeks down the line is a huge plus.
  • Lender:  Are you working with a local lender?  While it’s swell to think about sitting on the couch in your skivvies and applying for a mortgage on-line, it may not be in your best interest in this market.  Remember the 48 hour time frame we talked about above?  Often, that happens over a weekend.  You need to have a great lender that will take a call from your Realtor at 9 pm on Saturday night who’s shrieking “WE FOUND ONE!  I NEED A LETTER FROM YOU RIGHT NOW!”  In addition, your local Lender can offer creative solutions while you’re crafting your offer, as well as telling you how far you can “push it”.  Push it real good.
  • Loan:  There are many great loans out there that offer buyers the opportunity to purchase with very low (or no) money down.  However, this market has given sellers the freedom to narrowly specify what type of loan they are willing to accept.   And remember, if a home has been recently “flipped”, it may not be eligible for certain loans.  Be sure to take the time to visit with your Lender to explore every loan possibility that may be available to you.  Knowing all of your financing options can give you the flexibility you need to get your offer reviewed or accepted.  There’s that word again.  Are you starting to feel like Gumby?
  • Price:  So you’re approved for a $250k mortgage?  Don’t shop for a $250k home.  You’re probably going to have to offer over asking price to be competitive.  Adjust your search parameters to the $225 price range so you have some room to “over offer”.
  • Creativity:  While nothing is guaranteed to work, your Realtor should have a menu of strategies that can help in this market.  Have you written a charming letter to the sellers, telling them how you were magically transported to the Kingdom of Awesome the minute you walked through their door?  Have you considered offering more earnest money than the seller’s are asking?  Can you sell a bodily organ for cash to increase your down payment?   Do you have funding to waive pricing differences when it comes to appraisals?  Are you willing to cheerfully work within the seller’s timeline for closing, possession, etc.?  You never know what’s going to work in this market, so pull out all the stops.
  • Smile:  You’re going to need to grow some thick skin.  This market is worse than finding a date in middle school.  You may be rejected over and over, but you can’t get depressed.  Stay on it and stick with it.  You might even make new friends!  While out on the “Property March”, we will often bump into the same folks (other buyers and their Realtors) over and over throughout the day.  By the third house, we’re sharing tips.  We’re all in this together.  Be flexible.  Adjust.  Smile!
  • Give your Realtor a Cookie:  As challenging as this market is for you, it’s even more challenging for your Realtor.  After your long day of property shopping, they’re the ones that have to race to the office, contact Lenders, and craft multiple page offers late into the weekend night.  And remember – you probably aren’t their only customer.  They could be going through this with multiple people, so be gentle.  Thank you!

 

 

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