This week Norma Toering & Team once again found ourselves in a real estate feeding frenzy when a new listing hit the market. The early signs were evident with agents jockeying for parking spaces at the broker open house tour. I arrived with a client in tow and was back later the same day with the rest of the family. Everything about the property was perfect for them except the number of others buyers obviously having the same thoughts dancing in their heads.
Competition is good for the market and reflects capitalism at work. However, when eight buyers write offers on the same property it is obvious the supply and demand is out of balance. When choices are limited the scarcity fear factor rears its head and makes sensible people overbid, remove protective contingencies from the contract and throw budgets and caution to the wind.
Calm down. Gather your wits and patience and remove yourself from the fray unless you are absolutely positive your life will not be worth living unless you win the bidding war at any cost. Sacrifices are sometimes worthwhile if it’s “the one” but if it’s not, know there will be a trickle of new listings added to the inventory each day.
1) Track inventory daily and shop 5% to 10% below your top price. This will leave a comfort zone if the property receives multiple offers and bids over the asking price.
2) Write a clean offer leaving no question unanswered. Loan pre-approval, proof of down payment and sufficient funds to close escrow should accompany your offer. Do not give the seller and his agent a reason to toss your offer in the rejected pile.
3) Expand your options. Do you really need 4 bedrooms or will 3 suffice? Is there another neighborhood, home style or location you can add to your search? Review your criteria and see where you can tweak it to increase the number of homes available.
It takes sellers longer than buyers to react to a change in the market. Buyers can enter the market immediately. Sellers must prepare their property for sale (this can often take weeks if not months), make life decisions about where they will move as well as consider financial ramifications of the sale.
Inhale, exhale. Your future home may be receiving a fresh coat of paint and a landscaping facelift along with being staged for a successful sale. Patience is definitely a virtue in this market.