The summer of 2020 has been nothing but interesting, to say the least. While the coronavirus has negatively impacted much of our economy, real estate has gone the opposite way of the stock market. Most of this is likely due to our low interest rates. Let’s face it; rates of 3% and lower are like getting free money. I once saw a loan that was refinanced on $1.25 million for 2.9%!
There are many favorable factors for buyers in our market, but there are also many challenges. Our is a seller’s market, which means we have low inventory and high, pent-up demand. In June, the median house price nationwide went up to $295,300, and you’ve probably been feeling the sting here as we see prices in the Ville creeping up. Sellers are finding that they’re getting multiple offers well above the asking price.
So what can buyers do to succeed during this crazy time?
First, you need to be decisive. Time is of the essence—you won’t have a lot of time to waste if you find a home you want.
If you do find a home you want to make an offer on, make sure it’s a clean offer. The time where sellers were offering concessions or assistance with closing costs are gone. Right now, you need to be clear about your closing date, what financing you have, and use as few contingencies as possible.
Buyers also need to let go of perfection. People often walk into a home and expect it to be something like they’d see on HGTV, but you shouldn’t expect to find that right now unless you’re at a price point above $500,000. We’re moving back to the time where if you put a little bit of elbow grease into a home, you’ll get a return on your investment in the long run.
Additionally, be disciplined with your budget and understand your limits. Houses are priced a certain way because that’s what the listing agent thinks that house should sell for in this market; buyers need to use a similar mentality when making offers. If you go after a house over your budget, you’ll wind up house poor, and nobody wants to find themselves there.
One of the easiest tricks to getting your offer accepted is to offer more earnest money. To hold a house down, go ahead and put down between $2,000 and $4,000 to show that you’re a strong buyer.
If the market is tough and you have some flexibility when it comes to when you’re able to buy, you could also consider holding off for the moment. That may not be the answer you’re looking for, but it could be the answer you need.
If you have any questions about this topic or you’re looking to buy, sell, or invest in real estate, don’t hesitate to reach out to us. We’re always here to help.