Home buying in a competitive market

Stretching Your Dollar

INDIANAPOLIS –  Buying a home in this market is extremely difficult for most buyers.  It’s almost a competitive sport with the demand being high and the supply of homes being low.  There are ways to get your offer on a home accepted over others. 

Just how difficult is it to buy a house right now?  We asked a couple realtors and it may shock you.

“I recently pended a transaction for one of my buyers.  We were up against 43 other offers and with spring being here and tax time as well, there are so many people looking for homes,” said Daniel Leeper with EXP Realty.

If you are looking to buy, they say you can separate yourself from the other buyers.  If you don’t do something to set yourself apart from the crowd, your chance of landing a home are increasingly slim in this market.

“We focus on if you can get buyers purchasing a home without a lot of conditions.  We also look for buyers who are bringing additional cash to cover appraisals and potential appraisal shortages.  Then one of the biggest facts is which buyers have the strongest amount of financing,” said Alex Montagano, a broker with EXP Realty.

The phrase “cash is king” is heard in many types of business transactions.  And with home purchasing, it’s even more true in this market. 

Offers with 20% down, even 50% are not unheard of, but not many people can provide that kind of money.  Here’s one thing that most everyone can do to stand out.  You can agree to buy a house “as is.” That option can make sellers more likely to take your offer.

“When you agree to ‘as is,’ you’re going to get the accepted contract, and you’re going to have an inspector come in and take a look at it.  But you’re not going to ask the seller to make any repairs for you, almost no matter what they really are,” said Leeper.

The other thing is for buyers to offer what are known as “appraisal gaps.”

“A bank is only going to give you a loan for what the house is worth.  For example, your offer might be $20,000 over list price.  And that’s cool except for it might not appraise for that much so buyers are bringing the difference.  That could mean bringing in an extra $10,000 to $15,000 in their own cash to closing to get the deal done,” explained Leeper.

Here’s another idea for potential buyers to offer the seller, have flexibility after the closing.  That is something certain sellers may look for, and if you as a buyer can offer it, that could be key.

“The attractive thing for a seller is when a buyer is willing to give them post closing possession.  That could mean giving the seller an extra week or two to get out of the house.  That way they don’t feel rushed as soon as they sign on the dotted line,” said Leeper.

One thing you can not do anymore to set yourself apart is writing a letter to the seller.  Many people have done that to tell a seller why they should choose your offer.

“Those letters to a seller contend to be Fair Housing violations so we’re actually asking our sellers not to review them.  We’re not presenting them to a seller any more either because again it is a fair housing violation.  We are also asking our buyers to no longer write them,” said Montagano.

You can sell your own house or even buy on your own, but given all the competition and details, buying and selling a house is one transaction where a professional is often key.

“If you don’t know what you’re doing and you don’t know the fine print, you could get into these transactions and not know how to get out of them.  As a buyer you may not know how you are protected.  Or as a seller you might say ‘this is no longer beneficial to me, and the buyer is out of contract, what do we do?’  The easiest thing to do is leverage the use of a professional who can put you in the best position of success,” said  Montagano.

The brokers FOX59 spoke to also suggest to sellers to make it easier on yourself by slowing things down just a bit and have a selling plan. 

For example, list your home on a Wednesday, start showings on Thursday and start reviewing offers on Sunday.  That gives three days for buyers to get in the door and write offers.  Then the seller has time to make a decision.

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