BEWARE: Mean Realtor-Lady Advice Ahead
If you’ve written 71 offers and still you have not succeeded in buying a house, you’re doing it wrong.
I know that seems harsh.
Let me help you with a few tips, the first of which is self-serving: Get A Realtor. There, I said it and it’s out there. Buyer’s agents are free to you; use their expertise to your advantage. If you have a good one, you may not need the rest of this article!
The second tip is this: There is no charity in real estate. I say this after spending years on the listing agent side of the table. Often, we receive low offers accompanied by a plea that states that the buyer has written scads of offers and so far has not prevailed and is now crossing all of her fingers and all of her toes hoping we will grant her this one little house, pretty please.
Even though the buyer is absolutely charming, we will not. Because we received 20+ offers, most of which are better than hers.
Because there is no charity in real estate, homeowners will not sell you a house at list price if someone else will pay them more than list price. Their very fierce allegiance will always be to the well-being of their own family and this is their family’s most valuable asset.
71 unsuccessful offers!! Do we have a poverty-stricken buyer? Maybe. More likely though, we have a buyer failing to launch correctly.
Writing an offer when you are new in the market is like your first attempt at double Dutch jump rope. Or, maybe attempting to turn onto an unfamiliar, high-speed road. You begin by gauging the speed of traffic, yes? Or, by watching the rise and fall of the rope as it twirls by. Simply hitting the gas or careening randomly into the game will result in getting smacked by the rope or ending up on the side of the road, wheels up. A buyer who continually crashes is one who is simply ignoring the market or trying to bend it to her will.
Study. The. Market
It’s not enough to see what the list price is. In most cases currently, its practically irrelevant except as a starting place. What are the sold prices looking like? How many buyers might vie for this house versus one in a higher price range? When I go for my showing, are there people in cars wrapped around the block awaiting a chance to get in? Could this be an indication that the listing will probably garner offers $30k or more over list price. Is that still in my price range?
Do NOT Look at Houses at the Top of Your Financial Range
Sellers used to price their properties “a bit above” the offer they would hope to get, intending to give themselves some “bargaining room” — room to concede some dollars without sacrificing real value. Wasn’t even that long ago. Nowadays, buyers must give themselves room to negotiate UP, concede dollars. Look at houses priced $20,000 or more BELOW what your pre-approval letter says so you can be the one to write that really Great offer. If no houses ever appear at $20k below your top budget, something must change – either the location (move further out in your search), or the size/improvement level of the home. Instead of a detached three-bedroom-two-bath, try a townhome.
If you cannot compromise on geography, condition/size/improvement level of the home, assume this is not the market for you. It does not make sense to write offer after offer, suffering constant rejection. If you can’t change what you are willing to live with, re-tool your finances. Get a second job, sell something to increase your down payment. Consider a roommate or two and use the rent-savings to pay your future closing costs. See if the first national bank of Mom and Dad – or your 401k – can help you.
Learn from Failure
If you didn’t get the house, find out why. Was it simply that you didn’t offer high enough? Or was it something else? Did you ask for help with closing costs when no one else did? Did you fail to offer rent-back to the seller in case he needs more time to move? Were you stingy in your earnest money? Did you ask to perform 67 environmental tests beginning with Asbestos and ending with Zinc?
Finally…Should you Give Up?
Several years ago, I had buyers who said prices had just gone insane and they would NEVER pay that kind of money for a house. They decided to sit out the market for a year or two and then buy “when things cooled down.” It was 2015.
If they had bought a $350k house back then, it would now be worth $500,000. Or more. They’d have a huge down payment as move-up buyers, which upon sale would have rewarded them with a great mortgage on the bigger home they always wanted. And, a seller seeing their offer would look at how solid their financing was and treat their offer with respect.
Put it this way: You have to pay for housing, one way or another. Better to be paying yourself than someone else.
Ante up and git er done. You will not regret it.