After you’ve gone through the effort of finding that perfect place, one of the worst things to learn is that you’ve been outbid by another buyer or real estate investor. Losing your dream house is discouraging, and it can be difficult to pick up the pieces to try and find another home to fall in love with.
In order to make sure this doesn’t happen to you, here are four ways to win in the competitive home buying market along the Wasatch Front.
1. Get real-time data
The Wasatch Front market is competitive. In fact, according to recent media reports, the market is on fire meaning there are many more buyers than homes for sale. The most recent data shows that Wasatch Front homes were selling much faster than in the previous years at an average of 48 days on the market in 2015, versus 62 days on the market during the same period in 2014. In 2016, preliminary data shows homes are selling even faster.
In this hot market, you need real-time data to stay ahead of your competitors. Information about market conditions, standard practices, and average listing and sale prices can help you be ready to put together the right offer. This information is available to any homebuyer through real estate websites and apps such as Zillow and Trulia.
When you do your homework, you will understand the various dynamics in your specific target neighborhood and you’ll be ready to make a quick and well-informed offer once your dream home hits the market.
2. Be ready with your team
There’s a lot of complexity in the process of buying a home, and it takes a whole team of experts to help you land your new home. First-time homebuyers need to be aware of the process and make sure their team consists of an attorney, lender, home inspector, homeowner’s insurance provider and title/escrow company. Buyers who are able to act quickly to complete paperwork and other important steps have a better chance of getting a home under contract and then successfully closing the deal.
Whether this is your first home or not, it’s smart to be pre-approved by a lender before you begin the search for a home. This will help you know exactly how much you can afford and will guide you in putting together a competitive offer that works with your budget. Many lenders make it easy to get prequalified on their websites. When you do make an offer, sending your prequalification letter with the offer will show the sellers you are a serious and qualified buyer.
When you have all the necessary pieces in place, you’re ready to make your move. If you see a home you love, you should take a tour in person and then make an offer as quickly as possible.
3. Browse owner listings
Many homeowners are now listing their homes themselves without the help of a real estate agent. New services like Homie, which allow homeowners to sell without traditional real estate agents, are emerging to help sellers save substantially on selling costs.
As a buyer, you want to find the best deal on the best home. To make sure you don’t overlook any available inventory, it’s a good idea to browse “for sale by owner” listings on sites like KSL Homes and Homie, as well as Zillow and the traditional MLS. The most important thing is finding the home that is the perfect fit for your family, so the more places you look, the better your odds of discovering a hidden gem.
Just because a seller is moving doesn’t mean they’ve stopped caring about the property. In fact, it’s often the opposite — most sellers want to see their homes end up in good hands. Believe it or not, homes don’t always go to the highest bidder or even to the buyers that can close the fastest. Sometimes sellers really value non-monetary factors when deciding which offer to select.
When you work directly with the seller, you can prove to them that you have their best interests in mind. It is a great idea to share your story with the seller, or write a cover letter to your offer describing your love for their home. Sometimes it’s the personal connection, rather than the financial considerations, that seal the deal.
4. Negotiate realistically
You want to get into a home as quickly as possible, but you still need to be realistic in your negotiations. Don’t chase your “dream house” without considering the costs. If you find a home you like but it is out of your price range, or requires lots of repairs and upgrades you can’t afford to take on, don’t get too invested. A better one will come along soon.
When you put your offer together, keep in mind that home ownership has added costs compared to renting such as maintenance costs, taxes and insurances fees. These need to be included in your budget from the get-go. Don’t overextend yourself in the heat of the chase and end up with a mortgage payment and other home ownership costs that will stretch your budget too thin.
In addition, don’t make lots of lowball offers just hoping to score a great deal. This tactic rarely works, especially in a hot market, and can sometimes keep you from getting a home that you really like. If you have done your homework, you should know the price range for homes in your target neighborhood. Make an offer that reflects the home’s value and features, but still fits within that price range.
Another way to make your offer stand out and give you an advantage in negotiations is to use an attorney instead of a real estate agent to help you write and submit your offer. Real estate agents get paid three percent of the purchase price when they help you buy a home, so if you don’t have an agent, the seller won’t have to pay that three percent. That means you are much more likely to have your offer accepted while still saving money compared to other buyers that are using agents.
Today, there are even services like Homie that connect you with a real estate attorney to help you prepare an offer and then provide you with software to guide you through the rest of the home buying process and connect you with a team of preferred service providers — all for free!
Negotiating can be the toughest part of buying your new home, but the benefits are well worth the effort it takes to do it right.
Winning a home on the Wasatch Front
Utah’s Wasatch Front is an amazing place to live with a high quality of life, so there’s no question that it’s a great place to buy a home. Because of this, however, the Wasatch Front real estate market is hot, and in a competitive climate, you have to be extra prepared so that you don’t let the home of your dreams slip away.
Make sure you’re in the best position to submit and negotiate your offer by doing your homework, assembling the right team, using an attorney and looking at all available listings on your own. If you do these things, you’ll be ready to make your move the minute you walk in the door and know the house you’re touring feels like home.