June 04, 2021

Realtor Jeremy McHone talks about why buying why it’s a good time to buy in 2021.

What You Can Expect Buying a Home in This Market

We all know we're in a crazy market. It's low inventory. It's a sellers market. We've heard all these things but what does that mean when it comes to actually buying in this market? I'm Jerry McHone with the Whissel Realty group, and I want to talk to you about what it's like to be a home buyer in this market. What is it like to be a home buyer in this market right now? Well, you probably know that we're in a sellers market. That means that there's more buyers than there are homes for sale. When it comes time to buying a home, you're probably not going to be the only person that's interested in that home.

What are We Seeing in This Market?

The first thing we're seeing is a limited number of showings. A lot of sellers know that when they put their home on the market there's going to be a lot of people that want to see it. We're seeing a lot of homes come on the market having showings only on the weekend. And oftentimes those showings are for a limited number of hours, say 10:00 to 2:00 or 10:00 to 4:00 with showings every fifteen to thirty minutes. If you want to see a home you have to be, clear schedule and you have to be flexible. I'll give you an example. I recently had a weekend full of showings where with the same client, I was showing homes at 10:00, 10:30 in the morning, 2:00 in the afternoon, and then at 4:00 PM the next day, because that's just what it takes to see a home in this market. You have to be flexible as both a buyer and as an agent.

Multiple Offers

The next thing we're seeing is we're seeing multiple offers on almost every home, if not every home. Your offer has to stand out and what I'm doing right now to get it to stand out amongst all these offers is a few things.

First I'm writing great offers, as far as terms go, I'm calling the listing agent I'm asking the seller situation, I'm cracking an offer that's specific to that seller and what that seller is looking for. But the other part of it too, is I need the listing agent to want to work with me.

Not only am I being communicative, I'm answering my phone, I'm giving them everything they want, but I'm also providing references of recent transactions I've done of those listing agents information. This agent can then call other agents I've worked with and find out exactly what it's like to work with me. Because in this market, this isn't really a negotiation. This is more of a job interview, and if you want to come to a job interview, you need to come prepared and you need to come with references.

Appraising

The next thing we're seeing in this market is we're seeing an issue with appraisals because if you're buying a home in this market, odds are, you're probably paying more than last few homes to sell in that market.

When it comes time for an appraisal to happen on the home, probably going to come in a little bit less than what you're trying to pay for the home. That means that you need to build into the contract in the initial offer, a way to address the appraisal. Now, one strategy I've used recently is we're actually seeing a lot of our buyers decrease the amount they're putting down so that we can take that money and allot it towards a lower appraisal. Instead of maybe putting 20% down maybe you put 5 to 10% down and then you use that other 10 to 15% to put towards a low appraisal to get the offer accepted.

The next thing we're seeing is homes not appraising at the right value, because if you get your offer accepted you're probably offered more than the last few homes sold for in that neighborhood. That means that when the appraiser comes to do the appraisal, there's a possibility that it comes in a little bit low. The way I've been attacking this issue is I've been encouraging my buyers to actually decrease the amount of money they're putting down as a down payment and setting that aside to be able to pay a gap for a low appraisal. I'll give you an example.

Let's say you're looking at buying a home for $600,000 and you're looking at putting 20% down, right? $120,000, what you might do instead to get your offer accepted is put 10% down. And then that way, let's say that home prices at 550, instead of 600, now that $60,000 that you saved from the down payment, you can put towards covering that gap between the 550 and the 600. That's another strategy. That's a strategy we're using to overcome the appraisal issue in this market because there's a good chance you're going to encounter it, but you're buying in the path of appreciation which means that, yeah, maybe you're paying more than the last few home buyers in that neighborhood.

But in a few, if you were to wait in a few months to buy that same home. You're probably going to be paying more money for it and have a higher interest rate. I know it may seem overwhelming and difficult to buy in this market. However, think about this, right now if you buy, you're buying in the path of appreciation.

Wrap Up

If you were to decide to wait and buy later there's a good possibility that you're paying more money for the same house and you're paying a higher interest rate for it. This is why I believe that if you're interested in buying a home, now's the time to buy it so that you don't end up paying more for the same thing later. If you have questions about whether or not now's the right time to buy or what it's like to buy in this market give me a call at 971-0791 or drop a comment below.

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