All-cash offers and contingencies: what you need to know
Kelly K. | Jul 22, 2021
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By Jennifer Shapiro on Apr 8, 2021
If you didn’t catch our last blog post on choosing a real estate agent before you start your home search, you can get caught up here. In today’s blog, we take a look at the fifth step to purchasing a home: how to house hunt in a hot market.
Today’s housing market is hotter than ever. A decade of underbuilding homes has caught up just as demand from the pandemic is hitting an all-time high. With the continuation of record- low mortgage rates and lack of housing supply, the market is not expected to cool off anytime soon.
If you’re house hunting in 2021, you can expect to be up against a lot of competition and it may take longer than usual to win a home. In a market this aggressive it’s likely you will only have one chance to see a home before you submit an offer and you may find yourself in a same-day bidding war. So, if you do see a property you like, you will need to put your best foot forward!
In a market this fierce, there is a good chance you will not get to see homes at your own pace. The time you are given to spend looking at a house will be rushed because most homes on the market right now have back-to-back showings. Preparing beforehand will allow you more time and space to focus once inside the home and help you reduce mistakes or delays.
To make efficient use of your time, make a day of it. Give your agent some lead time to line up as many private showings as possible in one day when you are available. If you want to see as many homes as possible during daylight hours, you might want to consider skipping a break that day and starting in the morning as early as possible. Likewise, it would be wise to avoid making plans for that evening in case you end up submitting an offer that same day.
Write a list of wants and needs for the home, then prioritize each list. If you’re buying a home with a spouse, make separate lists and compare. Review with your real estate agent before and then revisit after seeing 10 homes as a reality check on your price point and to narrow down the list.
Ask your agent to research “comps” for the neighborhoods you are targeting for your hunt. Studying MLS data of recent sale prices in the neighborhood ahead of time will give you an accurate reality check on the current value. Don’t rely on being able to pull up an online estimate while you’re touring the home. Remember: the data that is compiled by third-party sources on the Internet and is not always correct or consistent.
Ask your agent to generate a comps report and then walk you through it. Try to have this conversation at least few days in advance so you have time to review and are educated on the market prior to house hunting.
Pro-Tip: Ask your agent to prepare a folder with a hard copy of MLS sheets for each house you are seeing. Writing some quick notes on each home’s MLS sheet will help keep the details of each home organized in your head for reviewing later. The MLS sheets will also provide you with valuable information on the home and community including the price and date when the home last sold, property taxes, HOA fees and restrictions.
If you are absolutely certain that you don’t like a home, it’s ok to pivot and cut the tour short. On the flip side, if you do like it, take your time and make the most of it. Don’t be shy-this is your time to test drive the house. It is critical that you can see everything in the home clearly. Make sure all the lights are on and the curtains and blinds are open.
Bret Weinstein, Founder and CEO of BSW Real Estate prefers to split up from clients when touring a home to maximize the time. “My job is to walk through the house at the same time as you. And then we can meet up at the end and I can point out any material issues I saw, like is the home structurally sound? I want my clients focused on whether they feel like they could live in the home and would feel comfortable. My job is to walk through and make sure that the house is going to pass an inspection.”
Engage your senses when touring homes. Does the home smell stale or musty? Can you hear traffic from the street or highway? Do you see wear and tear that wasn’t visible in online photos?
Here’s a quick list of what to check for both inside and outside the home:
Pro-Tip: When surveying the interior and exterior of a home, it’s important to be honest with yourself and separate logic from emotion. Don't let cosmetic features like wallpaper that are easy or affordable to fix or replace dictate a homebuying decision. Determine what your budget for repairs, replacements and renovations is going in and focus on calculating the big-ticket items that can be expensive or intensive to fix like replacing a roof or heating and cooling systems. Recognize that certain things like the floorplan can be costly to modify, but things like showerheads are not and probably shouldn’t carry too much weight in your decision.
It’s very common for homebuyers to finish a long day of house hunting and struggle to remember individual houses- everything becomes one big blur. Do yourself a favor and take 5 minutes for notes, pictures and videos while you are in the homes.
Give each home a rating of either A, B or C and jot down some quick handwritten notes on the home’s MLS sheet so it is easier to connect the dots later. Walk through the home once and for “A” leads that are top contenders, take a second walkthrough video tour of the home by starting on the street where you can begin filming the block and neighboring homes as you walk inside.
Pro-Tip: Write down a few features or personal impressions that stood out about the home that will jog your memory later such as, “house smelled like curry, fire pit in backyard, Kim Kardashian walk-in closet
Pro-Tip: Don’t be too open in sharing your thoughts and feelings with the real estate agent who is showing you the home. Even if it is not the seller’s agent, it could hurt your ability to negotiate later.
Give your realtor immediate feedback when you leave the house while it’s still fresh in your head. Let them know what you loved or hated about the house, but specifically-what about it was the deal-breaker. This is also the best time to ask your agent their opinion on the home overall, but particularly, price and value.
“As soon as we walk out of the house, I ask my buyers, ‘would you buy this home, yes or no?’ says Weinstein. “If the answer is anything other than yes then we move on to the next house. I want to get their gut reaction. Because I think that's where there is so much value.”
With all these guidelines ruling your home search, it can be easy to get caught up in logic, feel overwhelmed, and lose the joy of shopping for a home. But buying a home is very personal and emotional; there is no app or algorithm that can predict what home you will or won’t fall in love with.
Don’t forget to take your heart with you on your homebuying journey and look for the “wow”-that moment you walk into a home and something about it takes your breath away or makes your head turn. Something about it that makes you feel at home.
House hunting can feel like a competitive sport in 2021 and easily leave you discouraged at the end of the day. But if you take a little time to prepare in advance and be proactive about it, you’ll be ready to submit a winning offer the same day you find the one.
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