Searching for a New Home: The Keys to Finding the Right Place To Live
Searching for homes is supposed to be the fun part about buying a home, but if you don’t do it right it can be a big time and money drain. I’m Sean Engmann a certified real estate negotiation expert and first time buyer specialist. Searching for homes the right way is one of the biggest keys to finding the right home for you, at the right price. There are two different phases of the search. Each is very important, but both phases should be handled very differently. The first phase is the pre-search. This is when you’re evaluating the market and trying to decide if you want to buy. You’re trying to find out which areas work best for you and what are some of the features of a house that you want to have. You’re also kind of dipping in your toe and getting a general sense of the market. This is the phase in the search where you can scour websites and visit lots of open houses. You can keep an eye on the prices and ask questions about the market, but at this stage, you’re not going to write an offer. The second phase is the active search. This is when you’ve decided for sure that you’re going to buy, you’ve defined your musts and busts and you have a pre-approval letter in hand from a lender defining your budget. At this stage, if you haven’t already, it’s important to hire a Realtor and let your Realtor take a lead on the search. Arrange private showings, don’t wait for open houses. The biggest mistake that most buyers make is that they never move on from the pre-search. They continue to conduct the search on their own and go to open houses. Often, they don’t even talk to a lender until they decide that they want to make an offer. This is problematic for two main reasons. First, the buyers have no idea of the market value of the homes they’re looking at, so they trust the list price. Especially nowadays, homes are being listed considerably below the market, so it’s likely that any offer around list price wouldn’t stand much of a chance in a multiple-offer situation. Because of that, buyers tend to look at homes priced within their means, which are actually beyond their means, which can lead to a letdown. Second, not having a pre-approval letter in hand, or a Realtor for that matter will lead to a fire drill when trying to write an offer. You won’t have time to properly evaluate Realtors or lenders and do everything in a rush. In fact, that’s one of the reasons why the list prices are so low – many Realtors like to use open houses as an opportunity to generate buyer clients or to double end transactions, which many aren’t skilled enough to do effectively. When you’re actively searching, it’s imperative to have a pre-approval letter and a trusted Realtor to take the lead in the search. That can also give you early access to properties and potentially some off-market opportunities. If you love looking at properties, you can still do so, but bounce any ideas off your Realtor ahead of time to make sure you’re not wasting your time. If you’re currently searching for a home, or considering entering the market and would like to chat further, just choose a time in the calendar to talk so we can come up with a plan for you. Thank
Don't Trust the List Price of Homes
Are you looking at the list price when shopping for homes? You shouldn’t. I’m Sean Engmann, and as the market remains strong here in the Bay Area some listing prices can feel like a bait and switch. For example, I came across a home that is listed for $11,000 less than it sold for 6 months ago even though two bathrooms were added, the kitchen was remodeled and the market appreciated by 10%. I’ve also had clients make offers above list price after homes have sat on the market for several weeks, only to be told that the sellers weren’t interested for selling for any less than 15% above where they listed the home. This type of pricing causes lots of buyers to waste their time looking at homes they’ll never be able to afford and can cause a considerable amount of discouragement. What’s worse is that as this type of pricing becomes more prevalent, buyers begin to adjust their searches accordingly, leading to less interest in homes that are actually priced transparently. While overbidding can be a function of a strong market, in the examples I mentioned the cause is deliberate, and it skews the statistics. Why are homes deliberately priced so low? In theory, the goal is to promote multiple offers and create a bidding war. Realistically, though, if there is a shortage of homes and multiple parties interested around market value, it is likely there will still be overbidding, just fewer offers from parties who had no chance to buy the home to begin with. So why are homes priced like this? Well, there are two key benefits to the listing agent. First, the listing agent gets to claim that they sold the home way above the list price, even if it was artificially low. Second, and perhaps more importantly, the listing agent wants to attract unrepresented buyers at a lower price point with the hopes of representing them later on as buyers. If you’re a buyer and you want to save time, you should engage a Realtor who understands the market early so you understand what the actual market value is before you get your heart set, and heart broken on a home priced artificially low. If you’re a seller, this tactic might be a good way to sell your home quickly, but it may not be the best way to get the highest possible price for your home. For more resources on finding the market value of a home or strategies for pricing your home, just click on the link.
Buyers: 8 Key Traits to Win in Seller's Market Today
When people find out I’m a Realtor the first thing that a lot of them do is talk about how difficult the market is for buyers. I’ve heard story after story about people who have friends who want to buy a home but don’t want to get beat down by the market. I’m sure you know of people who have quit the market after losing, maybe it’s you. I can assure you that people are beating this market and getting their dream home, I’ve worked with them. It all starts with their mindset and there are eight key traits that make them successful. Here are the 8 key traits that allow buyers to be successful in difficult markets. They have a plan. They know exactly what they’re looking for in a house and what they’re level of risk tolerance is. They strike quickly and don’t wait for open houses. They’re decisive. Competitive markets move in warp speed. There often isn’t time to take a second look, to conduct thorough pre-market inspections or sleep on a decision. They’re well-prepared. They’re cash buyers, or they have their financing locked down before looking at the home. They understand the market. They know that list prices don’t mean anything and they understand the actual market value of the home. They structure good offers. They understand the key needs of the seller and structure offers accordingly. They don’t include contingencies in their offers without a great reason to do so. They demonstrate that they can perform. They exude confidence from the start to finish of the transaction and include as much information as necessary to demonstrate to the sellers that they can perform. They know when not to write an offer. They don’t waste time writing offers if they can’t be competitive or if they need a contingency that they know will not be accepted. They find the needle in the haystack. They are able to locate a property off market or a home where the sellers are represented by a less informed agent. As a bonus, I’ll add in a ninth. They do what it takes to win and are committed to winning. That means they’re not greedy and if they have a chance to get the deal done, they do what it takes to do it without hesitation. Having a great Realtor helps. A great Realtor can guide and advise buyers in the search, provide market expertise and potentially find that needle in a haystack for their buyers. Having a great Realtor is essential to winning in a difficult market. If you want more information on how to be successful as a buyer in seller's markets, go can get my free guide here.
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