Tips for buying in a competitive real estate market

The local housing market is on the move. Sales are strong and the growing prices reflect the trend. With the demand come multiple offers and that is leaving some buyers in the dust. Here are a few tips on buying a house in a competitive market and benefitting from low interest reates and still low prices:

• The obvious one, the price: make the best offer you can afford. It may mean offering over the asking price. If your goal is to get the house, saving a few thousand becomes secondary, and a slightly higher price will add a minor bump to your mortgage payment (check with your mortgage calculator). If you are willing to compete with other offers include an escalation clause (it will allow you to beat other offers by a set amount up to a certain limit).
• It is about your financial standing: sellers want to know you are a qualified buyer and the deal will not fall apart because of financing issues. A 20% downpayment or better will show that you are likely to complete the purchase. An all cash offer eliminates financing contingency altogether. Though not for everyone, an all cash transaction can be refinanced past closing.
• The earnest money deposit can show that you are committed to the purchase-make it a statement by making a larger deposit (consult with your broker on the amount).
• Learn as much as you can about the area your are interested in: demographics, schools, parks, shopping and entertainment. Covenants and regulations  could be found on the local government sites. This can help you eliminate the need for the neigborhood review.
• Pre-inspect the house before making an offer. It takes time and some cash, but it allows making an offer without an inspection contingency (one of the bigger stumbling blocks in real estate transactions), or prevents making an offer altogether and wasting your time on a house that has too many issues.
• Communicate with the seller. Ask questions. It is easier to have an offer accepted if you know what the sellers prefer and are more likely to accept. Some offer details and concessions may even not cost you any money, but can make a difference.

Good luck with your house hunting. The reward is definitely worth it!

Alex Ceaicovschi, Realtor
alexceaicovschi@johnlscott.com