It’s no secret there’s limited inventory of homes for sale in St Petersburg and the beaches, so how do you go about buying a home successfully and minimize the frustration? Here are 5 tips for home buying in today’s market.
1. Speed Be prepared to view a home that fits your criteria as soon as it comes onto the market. Your realtor will provide updates directly from the MLS as soon as a home is listed, you can also get automatic updates from many websites as they pull new listings from the MLS. Call your realtor and see the home as soon as possible. If you like it, the chances are other buyers will too, so be prepared to make an offer the same day you see it.
2. Diligence First Make sure you know the neighborhood of any home you want to see – is it in the right school district for you, is it convenient for your work, is it close to shops, restaurants, the beach or other amenities, is there an HOA, are there rules about pets. If you like a home, but don’t know the answers to these, you may not have time to find out before making an offer – do your diligence first!
3. Financing Have your financing in order before looking. Many Sellers will not consider an offer without proof of funds – typically this is a prequalification letter from a bank or a letter from your bank stating you have the funds available. If a Seller receives 2 similar offers one with proof of funds and one without, which looks like the surest bet for them?
4. Know What you are Willing to Offer Unfortunately there isn’t alot of opportunity right now to make a low ball offer and see if the Seller accepts it – you can always come up, right? Maybe not, Sellers will frequently take the strongest offer to negotiate and discard the rest – if you’re not strongest then yours may be discarded. You may not make your best and final offer at the outset, but don’t be too far off. Other aspects to consider are the amount of escrow – higher escrow usually signals greater commitment, shorter inspection time indicates a greater willingness to to be locked in earlier, asking for fewer other concessions such as closing costs or a home warranty shows less tendency to “nickel and dime” the Seller, if you are a cash buyer then a quicker close is always attractive to the Seller. Overall, make sure you come in with a strong offer at the outset for a home you really want.
5. Know What the Home is Worth There’s nothing worse than having your offer accepted, and spending money for inspections only to have an appraiser tell you the home is worth less than you are paying for it. If you are getting a home loan then the bank could ask for a larger deposit so their maximum loan to value ratio is not exceeded – this is a frequent killer of home purchases. If you are paying cash there’ll need to be features so valuable to you, that you’ll pay over market price for it. Your real estate agent should be able to give you an accurate market price based on local comps before you make an offer – only you can decide what to offer, but knowing the market price is a key data point in making your decision.
This is a tough market to buy a home but don’t be put off getting what you want – it’s anyone’s guess on whether it will get better or worse. A good agent can help with property searches, showings, making a competitive bid and managing the purchase to a successful result. As ever, I’m here to help or offer advice – Tim Wood, Real Estate Agent.