Tips for Making Your Best Offer on a Home
While the wild ride that was the ‘unicorn’ years of housing is behind us, today’s market is still competitive in many areas because the supply of homes for sale is still low. If you’re looking to buy a home this season, know that the peak frenzy of bidding wars is in the rearview mirror, but you may still come up against some multiple-offer scenarios.Here are a few things to consider to help you put your best foot forward when making an offer on a home.1. Lean on a Real Estate ProfessionalRely on an agent who can support your goals and help you understand what’s happening in today’s housing market. Agents are experts in the local market and on the national trends too. They’ll use both of those areas of expertise to make sure you have all the information you need to move with confidence.Plus, they know what’s worked for other buyers in your area and what sellers may be looking for in an offer. It may seem simple, but catering to what a seller needs can help your offer stand out. As an article from Forbes says:"Getting to know a local realtor where you’re hoping to buy can also potentially give you a crucial edge in a tight housing market."2. Get Pre-Approved for a Home LoanHaving a clear budget in mind is especially important right now given the current affordability challenges. The best way to get a clear picture of what you can borrow is to work with a lender so you can get pre-approved for a home loan.That’ll help you be more financially confident because you’ll have a better understanding of your numbers. It shows sellers you’re serious, too. And that can give you a competitive edge if you do get into a multiple-offer scenario.3. Make a Fair OfferIt’s only natural to want the best deal you can get on a home. However, submitting an offer that’s too low does have some risks. You don’t want to make an offer that will be tossed out as soon as it’s received just to see if it sticks. As Realtor.com explains:“. . . an offer price that’s significantly lower than the listing price, is often rejected by sellers who feel insulted . . . Most listing agents try to get their sellers to at least enter negotiations with buyers, to counteroffer with a number a little closer to the list price. However, if a seller is offended by a buyer or isn’t taking the buyer seriously, there’s not much you, or the real estate agent, can do.”The expertise your agent brings to this part of the process will help you stay competitive and find a price that’s fair to you and the seller.4. Trust Your Agent’s Expertise Throughout NegotiationsDuring the ‘unicorn’ years of housing, some buyers skipped home inspections or didn’t ask for concessions from the seller in order to submit the winning bid on a home. An article from Bankrate explains this isn’t happening as often today, and that’s good news:“While the market has largely calmed down since then, sellers are still very much in the driver’s seat in this era of scarce housing inventory. It’s not as common for buyers to waive inspections anymore, but it does still happen. . . . It’s in the buyer’s best interest to have a home inspected . . . Inspections alert you to existing or potential problems with the home, giving you not just an early heads up but also a useful negotiating tactic.”Fortunately, today’s market is different, and you may have more negotiating power than before. When putting together an offer, your trusted real estate advisor will help you think through what levers to pull and which ones you may not want to compromise on.Bottom LineWhen you buy a home this summer, be sure to work with a real estate advisor to make your best offer.
What is a Buyer's Agent? The Benefits of Having One in Real Estate
What is a Buyer's Agent? Simply, this is a real estate agent who represents the person on the buying side of a real estatetransaction: the buyer. The agent on the selling side of the transaction representing the seller isoften referred to as the listing agent. They are there to serve the seller, which means that theywill be interacting with a lot of different buyers. However, if you’re the one looking for a home, then having a buyer’s agent working for you isprobably the best move that you can make. At first, you may wonder if it’s necessary to haveone in the first place, but there are a lot of benefits that come from this relationship. One thing to keep in mind, however, is that you have to have an agency agreement to get thebest services. While you could work with an agent without an agreement, a lack of guaranteeson both of your parts could lead to a lackluster process, which could affect your ability to close. Overall, it’s much better to enter into an agency agreement with your buyer’s agent if you wantto proceed. Not only will this ensure that you get the best service, but it offers written protectionsand guarantees that will come in handy during the buying process. Read more in "Your Guide To A Buyers Agent".
Why Homeownership Wins in the Long Run
Today’s higher mortgage rates, inflationary pressures, and concerns about a potential recession have some people questioning: should I still buy a home this year? While it’s true this year has unique challenges for homebuyers, it’s important to think about the long-term benefits of homeownership when making your decision. Consider this: if you know people who bought a home 5, 10, or even 30 years ago, you’re probably going to have a hard time finding someone who regrets their decision. Why is that? The reason is tied to how home values grow with time and how, by extension, that grows your own wealth. That may be why, in a recent Fannie Mae survey, 70% of respondents say they believe buying a home is a safe investment. Here’s a look at how just the home price appreciation piece can really add up over the years. Home Price Growth over Time The map below uses data from the Federal Housing Finance Agency (FHFA) to show just how noteworthy price gains have been over the last five years. And, since home prices vary by area, the map is broken out regionally to help convey larger market trends. If you look at the percent change in home prices, you can see home prices grew on average by just over 56% nationwide over a five-year period. Some regions are slightly above or below that average, but overall, home prices gained solid ground in a short time. And if you expand that time frame even more, the benefit of homeownership and the drastic gains homeowners made over the years become even clearer (see map below): The second map shows, nationwide, home prices appreciated by an average of over 290% over a roughly 30-year span. This nationwide average tells you the typical homeowner who bought a house 30 years ago saw their home almost triple in value over that time. That’s a key factor in why so many homeowners who bought their homes years ago are still happy with their decision. And while you may have heard talk in late 2022 that home prices would crash, it didn’t happen. Even though home prices have moderated from the record peak we saw during the ‘unicorn’ years, prices are already rebounding in many areas today. That means, in most markets, your home should grow in value over the next year. The alternative to buying a home is renting, and rental prices have been climbing for decades. So why rent and deal with annual lease hikes for no long-term financial benefit? Instead, consider buying a home. Bottom Line If you’re questioning if it still makes sense to buy a home today, remember the incredible long-term benefits of homeownership. If you’re ready to start the conversation, reach out to a real estate professional today.
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