I have been talking with quite a few people lately about how to buy a home in this very wonderful buyer's market.
In most cases, these people had been working with a friend (inexperienced in real estate), and they were finding great homes but could never reach an agreement with the homeowner.
Offers were made, but they kept losing out to other buyers.
How on earth do you keep finding homes with multiple buyers in a housing market that has a glut of inventory?
The Emotional Highs And Lows
The most irritating side of this is the emotional highs and lows.
- You are told it is a historic buyers market.
- You are told that interest rates are so low you need to buy fast.
- You are told that there are thousands of homes for sale in Tallahassee, and not enough buyers.
- You are working with somebody who (should) know how to buy a home in your market area.
But then, you find the perfect home, you make an offer, but you're told by your real estate agent that somebody else beat you to the deal.
It's so maddening and illogical, right?
How To Buy A Home When The Seller Will Not Negotiate
Fortunately, after reading this, you will know how to buy a home and you won't have to deal with the emotional roller coaster that ensues when you go about it the wrong way.
First of all, every seller will negotiate. The seller in these scenarios is not the problem.
How To Buy A Home - Choose The Right Real Estate Agent
The problem is that poorly guided home buyers treat every prospective home the same way. They have a market opinion, but each home is situated uniquely in the market. Would you use the same negotiation style for a home priced to sell immediately as you would with a home that is grossly overpriced? I don't think so, but many buyers do.
So solve this first problem by making sure you work with the right agent. Sure, you can work with your friend who "does real estate," but why wouldn't you work with the best real estate agent in the market to ensure that you get a great deal and save money? Is (not upsetting) your friend worth tens of thousands of dollars?
How To Buy A Home - Work The Process
Too often, new home buyers want to run out and start looking at houses. In fact, many buyers end up finding their real estate agent when they do this.
And this is horrible. When you put the cart before the horse, nothing good is going to happen.
There are things that should be done before you put yourself into a position to create an emotional attachment to a new home. For example, you should choose your real estate agent, not just get the one that "comes with the house."
Also, you should get your financing in order (or your cash), so that you understand the parameters of how to buy a home in the value range you desire.
And you better gain a solid understanding of current market conditions. Supply and demand in the area(s) you want to be, as well as what your posture is going to need to be. This might be a buyers market overall, but it's a sellers market in some small niches. Knowing the market will allow you to better understand the competition for the home that you will find.
There are other important parts of the process that you should discuss with your chosen real estate agent, and all of this can be done before selecting properties to view. While this might not sound as fun as just going to look at houses, it will save you thousands, if not tens of thousands of dollars, and it truly is how to buy a home!
How To Buy A Home - Choose The Right Properties
A while ago, I did an article that showed the breakdown of the homes for sale in Tallahassee, and they were grouped by sellers' pricing tactics.
What I found is that less than 10 percent (10%) of the market is priced for a quick sale, while about 20% was priced fairly, and thus 70% was priced above the market.
Here's what most real estate agents and most home sellers don't know ...
Real estate is always a sellers market! It's true, read all about it by following the link.
Your property search, when done using the right tools, will lead you to the "best deals on the market."
That means it is highly likely that other buyers will find the same homes (everybody wants a good deal, right?). So you have to be the best offer the seller receives!
Being The Best Offer The Seller Receives Is How To Buy A Home
If you hire the best real estate agent, you work the process, and you choose the right properties, then the rest of how to buy a home is easy.
Any home you've extracted from the thousands available will be attractively priced (because you've eliminated more than 90% of the market with the process).
When you factor in liquidity in the housing market, then you will know how many other buyers are likely interested in the home that you favor. If it will be more than just yourself, you will need to make a bold offer. Often times, wise home sellers have priced their homes lower than what the final sales price will be, so don't hesitate to make an offer above asking price if your (highly skilled and hand selected) real estate agent advises you that is what is needed to be above the competition.
Remember, homes priced below the market attract multiple buyers, so the seller's asking price is far less important in how to buy a home than your understanding of the value of the home. And that is why your real estate agent selection is so critical.
And if somehow your search has found a home that is grossly over-priced, you need to understand that this is a homeowner who really does not have a home to sell. When you make your offer (at what you think it is worth), this seller will not budge. Avoid these sellers at all costs, as nothing good can happen by looking at an overpriced home.
If you want to read more articles related to how to buy a home, just follow this real estate link to hundreds of articles that discuss the finer points of buying a home.
If you think you know how to buy a home and are ready to move forward, just drop me a note and we can get you started in this wonderful buyers market.
Joe Manausa, MBA is a 26 year veteran of real estate brokerage in Tallahassee, Florida and has owned and managed his own company since 1992. He is a daily blogger with content that focuses on real estate analytics and providing his clients with a tactical advantage in today's challenging market.