Buying a house in a competitive market

Stretching Your Dollar

INDIANAPOLIS – This is the time to sell your home, if you are considering it. Interest rates are very low and the value of your home is very high. 

It is a seller’s market, but what if you are trying to purchase a home? We have a few tips so you don’t regret the most expensive purchase you are likely to make.

Brokers say the buying process won’t be easy because the supply of houses is so low compared to the demand. They also say: Don’t panic and make a mistake by overspending. 

“You are looking at supply issues, with a ton of demand and with inflationary concerns, it is all driving up prices right now,” Todd Byczek, associate broker with the Fishers-based Chris Schulhof Selling Team, said.

Byczek tells FOX59 you can still get a house, but it’s not a good idea to way overpay as a lot of people are doing. Those people might regret it if prices come down and the valuation of their property does the same. 

If you’re thinking about building a home, keep in mind that will cost you about 30% more than last year.

“The price of lumber is way up,” Bycek said. “A 2×4 board about half a year ago was under $3. Now it’s over $8 a board, so items to build a home have gotten much more costly.”

Lumber forecasts are starting to level out, so that’s the good news. But it’s unclear if there will be a trend downward anytime soon on building materials. 

If you are trying to buy a house, first understand that many home listings are underpriced right now to get more people interested. Then, when potential buyers check out the home, there is often a bidding war, which can drive up the price by tens of thousands of dollars.

“So a list price means nothing. The appraisal means everything because your bank, your lender is only going to lend you what it appraises for,” Byczek said.

Many Realtors can do a fairly accurate mini-appraisal so you know what a home is worth, what your maximum bid should be and what the bank will give you. You can always pay more than the bank’s appraisal, if you have that extra cash, but don’t go crazy. 

To separate your offer, you can also have your Realtor write a contract with leeway in what’s called “possession.” That spells out when the new homeowner will take over the property from the seller.

“As a broker, we consider if we want to allow the client to stay in their home longer,” Byczek said. That’s a negotiating tool that you can use that might sweeten the pot for the seller.”

You can make your offers even sweeter by not having homeowners pay for minor fixes. Byczek says he never suggests totally waiving an inspection, which some buyers are now doing to get a house.  He suggests writing an offer with an inspection, but don’t have owners pay for anything minor, even medium. 

“If there’s something structural wrong with the home, if there’s something major mechanically wrong with the home, if there’s a mold or mildew issue, you want to be protected in that. If you don’t, that could cost you thousands of dollars you did not budget for,” Byczek said.

If you’ve had no success after making a lot of offers, consider shopping around for Realtors. Those with more extensive relationships in the business may be able to find out what the seller wants and tailor your offer to match. And some just have better records getting the job done, just like any business.

Don’t forget that the lender is also important in getting a house. If possible, use local lenders because they know our market.

“We suggest local lenders versus somebody in New York, for example, who isn’t going to send an appraiser to the seller’s home. They are going to do it sitting at a desk from a computer, and that isn’t always advantageous to the buyer or the seller. A good and accurate lender could mean the difference in the sale happening,” Byczek said.

Despite offers that may not get accepted at the time, many Realtors say their buyers often end up glad those home offers didn’t work out when they get their eventual house. It can be a long process, but in the end, things often work out for the best.

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Most Popular

Latest News

More News