This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013. Please submit follow-up questions in the comments section or via email.
Question: We are planning to buy a home in 2014 and are a little anxious about how much of a seller’s market it will be. Can you share some strategies that have worked well for you in a seller’s market?
Every situation includes a unique combination of needs, wants and personalities. That said, I’ll share three tips you may want to employ during your home search and negotiations.
1) It’s not just about the money. Unlike what they show on TV, each offer includes a multitude of criteria in addition to price. I try to find out as much as possible about the sellers’ situation before making recommendations to my clients. For example, I want to know why they are selling and when they prefer to move out. I ask about any specific concerns they have about the sale.
Let’s say the sellers are still trying to find a new home for themselves. In this case, we may offer to close in 30 days so they have access to their proceeds, but allow the sellers to rent back the home for specific period of time so they have breathing room to complete their purchase and move out of their current home. If the competition is steep enough, we may offer to let them rent back for free.
Maybe they are weary about the home appraising. In this case, we can consider waiving the appraisal contingency if this is an option or working with the lender to cut the appraisal contingency period down from a few weeks to a few days. I can tell you from experience that working with the right lender is priceless in these situations.
There are literally hundreds of examples I can provide, but the point is that you want to consider more than just price when making your offer, especially when competing with other buyers. You’re welcome to read an article I wrote about the various ways you can make your offer more competitive.
2) Act quickly. I tell my clients from day one that we will take as long as they need in order to find the right home, but I want them to be in a position to move quickly once they find that home. Regardless of the market, another interested buyer can completely change the dynamics of your negotiations. You can save you thousands of dollars by wrapping up a contract before another buyer comes along.
Not every seller is going to be willing to accept an offer before they go on the market or within the first couple days of being on the market, but others are happy to do so if the terms you present are agreeable to them.
Make sure you have a solid pre-approval letter from local lender (or proof of funds if you plan to pay cash), funds available for your earnest money deposit and an agent that can work quickly on your behalf. I stress *local* lender because a savvy listing agent is going to educate their client about the issues that often arise from working with online lenders, out of state lenders and even some of the bigger banks.
3) “Temp Off” status and ASAP alerts. When you hire a real estate agent, chances are that they will set up alerts for you that come directly from the MLS. This really is the best resource for finding homes for sale, but I recommend two small tweaks to the search they set up for you.
Instead of just searching for “active” listings, suggest that they also search for listings that are “temp off”. Listing agents occasionally use this status when they are still in the process of entering photos and information about a new listings into the MLS. This is prior to it becoming an active listing… showing up on your mass alerts… and getting blasted to the Zillows and Trulias of the world. Yes, I have successfully helped clients purchase properties that never made it past “temp off” status.
When your agent sets up the MLS search, they can choose the frequency by which you receive listings. If you are passively looking, then once a day or week is probably sufficient. If you are actively looking, then they should set it up to notify you as soon as a listing hits the market. By doing this, you will know about a new listing as quickly as any buyer or real estate agent in town.
Good luck with your home purchase. When interviewing agents, I suggest that you ask them the same question you asked me.
The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.