Navigating This Red-Hot Real Estate Market
By Bill Budler
Do you want that house so bad that you are willing to take the house as-is, without any further inspections or repairs?
Maybe, offer to buy it without even seeing it?
Pay thousands of dollars more than their asking price?
Ignore the appraisal value and make up any difference in cash?
Sounds pretty extreme, but this red-hot seller’s market has created a real challenge for home buyers. Their offer may be just one of dozens of offers that the seller receives. So, buyers are trying all sorts of ways to make their offer stand out in the crowd. But when does it become unreasonable, and the cost and the risks grow too great? That’s a question that every buyer must answer.
Today, it has become almost commonplace for the buyer to gamble on any potential repairs by offering to purchase the house in ‘as-is’ condition and waive their right to conduct third-party inspections. It is important to thoroughly understand the risks and potential costs that come with such a strategy.
How much is too much to pay? A recent news story reported that home sales were bringing an average of 25% above asking prices. The principal of supply and demand is driving up real estate prices. Whenever there are more buyers than sellers you can expect price increases. Even professional appraisers are challenged to determine accurate values due to today’s rapid price increases. Ultimately it is the market that will determine values. Just keep in mind that prices can go up, and they can go down as well. Work with your Realtor to draft a creative offer. Make it convenient for the seller to do business with you. Perhaps offer to be flexible on the closing date. Include a clause that you will pay for professional cleaning once the seller moves out, one less thing they have to deal with. Do they need help in disposing of personal property? What if you paid their movers? Or offered a short-term lease back option? Sometimes convenience is preferred over money.
The bottom line is that we are experiencing an extraordinary seller’s market. It is driven by high buyer demand and fueled by incredibly low interest rates. How long it may last is anyone’s guess.
It is worth a word of caution not to get too caught up in the feeding frenzy of today’s market and make decisions you may regret later.
Bill Budler is a Seniors Real Estate Specialist© with BancWise Realty and a contributing writer for Lincoln 55+ magazine.