In a normal housing market, prospective buyers have the luxury of viewing a listed house, considering it and coming back a few days later with an offer. In today’s marketplace, this system just won’t fly.
Homes are flying off the market so fast that these days if you visit a home and like what you see, you’d better get a bid on the spot. Better still, make an offer with an escalation clause. This is a provision that will automatically increase this offer if another buyer outbids you.
And to be clear, in today’s market you lose one Bid war is pretty much the norm, even if you make an offer well above the asking price of a home.
The typical length of time a home spent on the market was just six days in May, reports Zillow. In April, the average time between listing and signing a contract was just seven days.
If you believe now is a good time to buy a home, you need to be ready to move quickly when you see a property that you think might be right for you. At the same time, you don’t want to make an offer for the wrong house.
Here are a few questions to ask yourself before you take the plunge.
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1. Does this house have the main features I want?
In todays glowing housing market, you can just be so picky about the features you are looking for. But that doesn’t mean you should compromise on the things that matter most to you.
If you have a larger family and need a home with at least four bedrooms, don’t settle for a three bedroom home without the option of building a bonus room. This is not going to do your family any good in the long run.
On the other hand, if the house you’re looking at has a nice kitchen with outdated countertops and appliances, even if a gourmet kitchen is on your wish list, you can handle it. Because you can always renovate this kitchen as long as you have the space.
2. Is the price competitive for the house?
In today’s housing market, home prices have risen across the board. But if the home you’re looking to buy is offered at a much higher price than comparable homes in the same neighborhood, you may want to look elsewhere.
When you get an offer on an overpriced home, you run the risk of it not valuing an amount high enough to qualify for property mortgage. Also, you don’t want to buy a home at too high a price because if you sell it a few years later you can suffer a huge loss.
3. Are there any obvious problems or shortcomings with this house?
You might think that a big mistake, like a broken roof or a heater that needs replacing, is something you can work with a salesperson on. But in today’s housing market, sellers may not be as flexible knowing they have the upper hand. As a result, you may not want to bid on a home that clearly needs work – unless that home is undervalued due to its shortcomings.
In today’s marketplace, buyers need to act quickly and that’s a difficult thing when talking about such a large purchase. Before you rush to get an offer on a home, go through these questions so you don’t regret your decision later.