You have seen this happen over and over. You are searching for the perfect home, watching the internet sites like a hawk, waiting for new listings to appear each and every day. Then finally, the perfect home appears the one you can’t live without. You contact your agent to schedule a showing. You are on your way to see the house when all of sudden you get the dreaded call. “Sorry, this house just went Under-Contract”. Ugh! Wash – Rinse – Repeat. This is even more frustrating if you are a relocation buyer in town for a weekend to buy a home.
Wow, what just happened? Don’t fret, you are not alone. This same scenario is happening over and over again all over metro Denver and buyers are getting frustrated with this feeding frenzy. So what happened?
Real Estate Market Topping?
Here are a few facts to understand. Basically, it is the “perfect storm”. Unemployment is very low in the Denver area right now and people are feeling more confident in making large purchases again. Second, interest rates are incredible right now and are extremely low. (Keep in mind that this is not expected to last forever and are predicted to rise again by the end of the year), Third, many of the financial institutions have come out with various grants programs and down payment assistance programs assisting home buyers to buy a home with little to no money down…again. (Remember the “mortgage crisis” the real estate market faced in 2007?).
So, now there are a ton of buyers. To put this bluntly, we are basically running out of homes to sell especially in the below $300,000 range. Inventory is tight. Larry Hotz from this real estate blog was just on CNBC to explain this. Just to give you an idea, as of January 2015, there are currently 5,951 attached and detached available homes on the market in the Denver Multiple Listings, this is down from a year ago of 8,688 and the prior year of 16,900. I can remember back in August of 2010 when there were 42,000 homes on the real estate market. Home owners, we need houses! Do your civic duty and cash in on that cash cow you are sitting on.
Home Buyer’s Check List
Listed below are a few tactics to help you be prepared and ready to get into the battle and win the bid.
1. Get with a good lender and get yourself pre-approved for a loan. Not just pre-qualified, but pre-approved. This shows the sellers that you have taken the preliminary steps to secure the financing.
2. Have some money saved to pay for your own closing costs. In previous years it was common for the seller to pay some of the buyer’s closing costs as seller concessions. With this market, the seller is looking to net as much in proceeds as possible. It is not impossible to win the bid with the seller paying some of the buyer’s costs, but it is a more attractive offer if they didn’t.
3. Find yourself a reputable and full time real estate agent. Someone who has the tools to find homes quickly and who is available to show you home when one become available. They should be able to have listings automatically sent to you within 15 minutes of the home being listed.
4. Make sure your agent knows how to properly prepare a contract on your behalf to assist you in preparing the winning offer. There are a handful of specialized clauses the best agents use in this type of a market to get their offers read, considered and won.
It is not an easy process right now for the average buyer, but with the proper preparation and guidance, it could be an exciting transaction.