Thinking of buying or selling a home in 2021?
In normal times, when you're shopping for a home, you take your time, look at several homes, visit Sunday open houses, and decide what fits your needs.
But these are not normal times.
Young parents Jonathan and Tiffany Moore have been outbid on three houses this year so far in their hunt for a home.
"We found one we love," they said, "but it already had several offers before we even got our offer in."
The Moores' Realtors -- Steven and Denise Taylor -- say buyers need to visit a new listing as soon as the owners allow them in, and then make an offer immediately, at asking price.
"We prepare our clients," Denise Taylor said, "letting them know they need to be prepared to offer over asking price."
Steven Taylor is even more blunt.
"You can't make a lowball offer," he said. "The list price right now is the floor."
Even then, you can lose out to another buyer who is offering more, or paying cash for the house, with no need to qualify for a loan.
"Bubble I have never seen before"
Realtors Shelly Miller Reed and Amy Roe say it's especially tough in trendy neighborhoods.
"I have been in the business 13 years, and we are in a bubble right now that I have never seen before," Reed said.
Roe says homes are getting multiple offers within hours of being listed. "I had a buyer write an offer on a listing that had 32 other offers on the table," she said.
That makes it tough to win a house, even if you are prepared to offer the asking price.
If you are a seller, this market is a dream come true, though it can be a bit overwhelming when offers start coming in every half hour.
If you have a move-in-ready home at the right price, you will probably get multiple offers in a day.
But then where do you go?
"A lot of people right now are choosing to rent," Reed said, " to take advantage of the seller's market, and then see what happens on the other side, in six months or so."
If you rent for a few months, you'll be ready to pounce -- with cash -- when your dream home comes up.
Otherwise, you have to enter the red-hot buying market, and start competing with everyone else.
But what if you want to buy now?
How to win a bidding war
Rocket Mortgage says to get an edge:
- Have a bank pre-approval letter, showing you are approved for that price.
- Add an "escalation" clause that automatically matches other offers that come in after yours, and tops them by $1,000.
- Drop contingencies, which means you agree to take the home "as is." The sale cannot be contingent on your selling your current house, as people did in the past.
- Some home buyers even skip the inspection process, although Realtors say that is very risky: it can leave you stuck with a termite-infested home or one falling off its foundation.
- Write a personal, heartfelt letter to the seller, though Reed and Roe say that is not as effective as it used to be, with so many offers coming in at once.
- Work with a licensed Realtor who will hear about upcoming homes before they are listed.
"One of the most important things is to work with an experienced agent," Reed says, "because we hear about homes that are coming up in the next few days."
Denise Taylor says, "We know exactly what is coming on the market, and we can be very aggressive as soon as it is listed."
Team Taylor is hoping to give Jonathan and Tiffany a heads-up on the next hot listing, so they can finally be awarded the "sold" sign.
"You are trying to win the race," Jonathan Moore said, "but you don't know where your competitors are on the race track. It's tough."
So what will the future bring?
Realtors hope things improve a bit next spring, as empty-nesters no longer locked in by the pandemic decide to put their homes on the market.
Till then, you need to be prepared to move quickly, so you don't waste your money.
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