If you’ve been following this column, or if you have any first- or even second-hand experience with the housing market, you probably know that it strongly favors sellers. I’ve talked about why housing prices are going up and shared tips for those who have decided they’re ready to buy. What if you’re not sure if you’re ready?
This list of questions is a litmus test for anyone who’s on the fence about buying a home. Listen to your gut and answer them honestly.
1. Does your schedule allow you to tour a home you like within 24 hours of its arrival on the market?
A flexible schedule is a must in order to view new listings that meet your criteria.
2. Are you willing to compete with other offers?
If you buy a house right now, your offer will probably compete with other offers. I have seen two, 10, 34 and everything in between. You need to be willing to compete to buy in this market.
3. Can you pay over appraisal value?
Strong financing and abundant cash are essential for making attractive offers. Escalation clauses, where a buyer promises to pay $1K, $5K, even $20K over the next highest offer, are extremely common right now. And because the market is increasing faster than appraisals can keep up with, in most cases you must have extra money to put down for a low appraisal if your offer is going to win.
4. If you currently own a home, do you have funds or arrangements that allow you to sell and leave your current home before you buy your next home?
It’s helpful to have a plan around selling and leaving your current home to avoid having to make an offer contingent on its sale. Sellers simply aren’t accepting offers that put them at risk of your sale falling through. Consider selling your home first and looking for a temporary rental. Or live in your new RV for a while. I’ve seen this strategy work for many of my clients.
5. Can you stomach a pass/fail inspection?
Are you willing to go under contract knowing you may need to take on improvements or repairs once the house is yours? Do you have money set aside to work on your new home afterward?
6. Do you need the house to be perfect?
Turnkey homes are as desirable as ever. If you’re working on a budget, prepare to settle for a home that may need some work over time.
7. Are you willing to pay top dollar from the start?
In this competitive market, there is no room for anything less than your highest and best offer. Buyers can’t start low and hope for a counter. They won’t get it. They’ll simply get a no, if they get a response from the seller at all.
If you answered “yes” to all of these questions, you may be ready to take advantage of the market, list your home, reap the profits, and buy another home. The team at Holistic Home Group is ready to help.
If you answered “no” to any of them, don’t fret. It’s okay to wait. According to market experts, you may face higher prices in the future but consider your mental health. It is stressful out there for buyers who have not considered these factors, who have not educated themselves and who have not managed their expectations well.
Buying a new home should be one of the most thrilling events of your life. My team and I are here to help guide you when you know you’re ready. Don’t hesitate to connect by email at KWoodford@kw.com or by telephone at 360-508-2800.
Kristy Woodford is CEO of Holistic Home Group, which is affiliated with Keller Williams South Sound. She has over ten years of experience as a broker of residential real estate in Thurston County and leads a team of realtors experienced in serving local buyers and sellers.
[Holistic Home Group also sponsors The JOLT's Weekly Real Estate Report, every Monday. Here's the most recent article.]