Over the past 12 months I’ve helped 24 clients purchase a home. Here’s what I’ve learned in the hottest Seattle real estate market since 2007.
First things first: It can take a while to find the right home in any market. This market is exceptionally tough, so give yourself time. Find a way to secure a living situation that affords you all the time you need to purchase a new home. If you have a flexible living situation, you won’t be influenced by pressure to move.
SEARCH FOR HOMES SAFELY UNDER BUDGET
Homes in desirable areas in Seattle, Mercer Island and the Eastside are selling above their list price by 5-10%, so if you have a budget of $750,000, focus your search on homes closer to $700,000. This gives you headroom to increase your offer if you face competition without exceeding your budget.
Keep an eye out for homes that are easily overlooked by others. Set a saved search on Redfin.com for homes that have been listed for more than a week. You’re far less likely to face competing offers on a home that’s been on the market for a week or more. The same is true of homes that go off and back on the market; this is typically due to a “failed” inspection or the buyer’s inability to obtain financing. These homes go back to the market with egg all over their face, so they can present an opportunity for a buyer who can see beyond their questionable history. Find out what happened, and proceed with caution. You may find a diamond in the rough.
BE PREPARED TO CONDUCT PRE-OFFER INSPECTIONS
When multiple offers are submitted on a property, sellers often care more about a sure thing than a little more money. An offer that’s contingent upon a home inspection won’t stand a chance if another buyer waives the inspection contingency or conducts a pre-offer inspection (“pre-inspection”).
GET THE RIGHT TEAM ON YOUR SIDE
The terms of your offer aren’t all that matters to a seller or a listing agent. The agent representing you and the lender you’re using to finance your home can strengthen or weaken your offer. Having an agent and a lender from a reputable, local firm can boost confidence in a buyer’s offer or take away confidence in the team as a whole. Your agent and lender should help you craft an offer that gives you the best odds, without undue risk.
IGNORE THE LIST PRICE
When you find a home you love, don’t be anchored by the list price when determining an offer price. With homes selling well above the list price, the best way to remain objective while planning your offer price is to determine a value that you believe is supported by recent sales; remember that value is subjective, so your offer should reflect what the home is worth to you.
LEARN ABOUT THE SELLER
Knowing about the seller can help you craft a winning offer! Why are they moving? Maybe there’s a term that matters a great deal to the seller, but very little to you.
WRITE A LETTER
Now that you know a little bit about the seller, be sure to introduce yourself. Tell your story. The best letters will help a seller understand why you love the property and why you’re a great buyer who won’t back out and leave the seller high and dry. If all else is equal, a great intro letter can help tip the scales in your favor.
There are countless ways to make your offer compelling to a seller, but not all of them will work for you. When you find a home that meets your needs, rely on your agent to help you understand how to write a winning offer.
Be careful out there, and holler if I can help you or someone you know!