Wednesday, March 6, 2013

What Every New Buyer Needs To Know In Today's Hyper-Competitive Market

Posted By on Wed, Mar 6, 2013 at 8:00 AM

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No. 1

First and foremost, it is a seller's market again, and it's appreciating weekly. That means comparable sales from even as recently as two months ago do not apply to what is happening today. The real information is behind the scenes right now, with the brokers and sellers—Streeteasy won't be able to tell you if the property sold above asking price while still in contract. That's why working with a broker who knows the market, and who you can trust, is always a good idea.

No. 2

Don't be turned off by bidding wars and offers above asking price. Some brokers purposely price the property lower than what makes sense for the market, with the express purpose of creating a bidding war. However, buyers can never truly know the seller's strategy. So make your final and best offer each time you bid on a property.

No. 3

Unfortunately (for buyers at least!), you need to realize that the appreciating market means that anything less than 20-25 percent down payment is going to have a tough time competing right now. Granted, financing is there for less than 20 percent but the competition is very stiff with high down payments and all-cash offers becoming increasingly common—even all-cash offers above the asking price. So if you're serious about buying, you have to save, borrow from family, and basically pull out all the stops to make a good offer. And I really don't see the market declining anytime soon.

No. 4

All of the above might seem a little daunting to new buyers, but it just means you need to be committed and flexible. Try expanding your search a little. Start looking at areas close to your target neighborhood or in your price range, because you never know what you might find: a place you end up calling home.

Photo by Austin McAllister

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