Perry Wellington 4.5 – Real Estate Market Updates, Old & New “Rules” | WTAJ

The Perry Wellington Realty 4.5 team take a look at the current real estate market and share some “rules” for house hunting that might be a bit outdated and what you should follow now.

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OLD RULE: FIND A HOUSE, GET A MORTGAGE GET A HOUSE
NEW RULE: MORTGAGE FIRST, THEN SHOP

In the past, getting pre-approved for a loan was something you could think about after finding a home you wanted to buy. Today, however, this approach can block your momentum from the start. In today’s fast-paced market, having your ducks online and completing your mortgage pre-approval is essential. before you make an offer.

“You should be pre-approved by a lender and knowledgeable about your finances before you even begin your home search,” says Beverly Burri, an agent for William Means Real Estate in Charleston, SC. “With houses under contract as quickly as they are now, often within days or sometimes hours to go to market, it makes no sense to go see a property before talking to a lender and learning what you can afford.

Postponing the pre-approval process could make your dream home slip away from you, she warns.

“If you’re waiting to see a home you like, you won’t have time to talk to a lender or submit your mortgage application before the offer deadline,” she adds.

Many homes today will have offer deadlines that will be impossible to meet if you fumble with the mortgage paperwork.

Also, having a mortgage pre-approval letter in hand when you make your offer will show sellers that you are serious and can go through with your purchase. This, in turn, will give you the edge over any competing buyers who have not completed this crucial step.

OLD RULE: BUY HOUSES YOU CAN AFFORD
NEW RULE: BUY BELOW YOUR PRICE RANGE

In today’s market, you might want to structure your budget a little differently.

Lori Ozleya Birmingham HomeBuyers manager in Birmingham, AL, advises buyers to look for homes with list prices below the top of their price range.

“These days, homes are selling for more than their list price, and as a buyer, you’re most likely going to find yourself in a bidding war,” she explains. “If you look at properties that are below your budget, you will have the opportunity to submit a competitive offer that exceeds the asking price.”

Let’s say your budget is $375,000 and you’re viewing homes that cost that much. Chances are, homes that cost $375,000 will sell for a little more than that. Your mortgage pre-approval will not cover the excess and you will be an unqualified bidder. To avoid falling into this trap, shop below your means so you have room to go up.

OLD RULE: VISIT THE PROPERTY, MAKE AN OFFER LATER
NEW RULE: IF YOU LIKE IT, ACT FAST!

Buying a home is an important decision. It’s no surprise that many buyers want to take the time to weigh the pros and cons of buying a particular property before deciding to submit an offer. Maybe they want to visit on a weekday and weekend, to see what the traffic is like, or during the day and after dark. Or they want to bring in Cousin Fred, who’s a contractor, to blast the tires, so to speak.

Yet today, many buyers who take this heavy-handed approach may find that the home they love is long gone the moment they pull the trigger – taken by a buyer who jumped a few hours after seeing the place.

Bill Samuel, the agent and investor behind Blue Ladder Development in Chicago, puts it plainly: “If you’re interested in a property, you need to act fast or you risk losing out to another offer. When you really like a property, you should sit down with your real estate agent, research the competition, and work on writing a same-day offer.

That’s not to say you should feel obligated to lay down money on the first house that looks right. Ideally, you should visit enough houses to understand what you want and what your money can buy. This way you can hit with confidence rather than feeling rushed and uncertain.GETTING A HOUSE: OLD VS. NEW

OLD RULE: SUPPLY BELOW DEMAND, WAIT FOR THE COUNTER
NEW RULE: PUT YOUR BIG NUMBER FIRST

The tactic of back and forth with a seller until you’ve struck a deal is a rarity in this hot market. With inventory at an all-time high, many buyers are vying for the same few available properties. Therefore, buyers need to craft strong offers to stand out.

“Be prepared to make your best and last offer early on,” advises Jodi Dougherty, luxury broker at Downtown Realty Company in Chicago. “Since sellers often receive multiple full-price offers, you may not have the opportunity to make a counter-offer if you are too low.”

That said, price is not the only factor that matters when submitting an offer. It’s often also a good idea to ask your real estate agent to find out what other negotiating points are most important to the seller. From there, you can tailor your offer to the seller’s needs. This involves things like whether you would be willing to rent to the seller for a month or two while the seller figures out where to move next.

“If you’re willing to be flexible, any degree of convenience you can offer the seller will strengthen your position,” says Dougherty.

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