So you have found the ONE- the home you can see yourself living in, where you will entertain your friends and family, where you will labor over improvement projects and celebrate holidays. Wait! Someone else has found it too. Even though it is a buyer's market in many respects, some areas and price ranges are seeing multiple offers on homes.
If you are going to be searching in a high demand area or price range, you need to take a few key steps before you look at homes to give yourself the highest chance for success. First, get pre-approved for a mortgage. By pre-approved I don't mean that you have just ran some numbers on an on-line calculator or talked to a relative who is in the banking industry. You will want to choose a reputable lender and do a mortgage loan application. To identify homes to consider, you need to know what your price range is and what loan programs you are qualified for; some properties are not eligible for all loan types. By figuring out the financing first, you to be ready to act quickly if you find a home and another party is interested.
Next, make sure you are working with an experienced Realtor that is familiar with your area and price range; you will be relying on their expertise to write a competitive offer. Buyers often do not take this step seriously enough. Buying a home is usually one of the largest financial transactions of your life. Take the time to find a trusted professional to assist you.
If you have viewed a number of homes and find one that really stands out in price, location, quality or features chances are someone else will notice too. You may have pictured yourself negotiating the deal of the century on the home but if another party is interested, you will need to adopt another strategy if you want to make it yours.
Typically if there is more than one interested party in a home in Minnesota, the listing agent will set a deadline for buyers to submit their "highest and best" offers. "Highest" is obviously referring to the highest price you are willing to pay for the home. Think this over carefully. While no one wants to pay more for a house than what it is worth, each buyer may have a different sense of the home's value. Your best bet is to consider comparable sales and decide what you are willing to pay. Homes that sell in multiple offers may be priced lower than the competing homes to ensure a quick sale. They very often sell above the listing price. You may have no idea what the other parties are offering which is frustrating to many buyers. Remember, the other parties are in the same situation. Submit an offer for the most you are willing to pay; another way to look at it is the amount that if another party is willing to pay any more than you, you can accept losing the home and continuing your search.
In writing your "highest and best" offer, "best" refers to the terms of your offer. To compete with another offer you want to have terms that would be desirable to a seller. For example, if the home is vacant, the sellers might prefer a quick closing date. Other areas the seller will compare between offers are seller concessions, contingencies, financing and earnest money. Your Realtor will be able to advise you on presenting the best possible offer.
Remember, you are searching for a place to call home. Don't get discouraged if you end up competing with other buyers for the right place. That just means you have good taste in homes!
Monday, April 11, 2011
Monday, April 4, 2011
My sister and two nieces were over on Sunday and I suggested one of my favorite hobbies - touring some models on the Parade of Homes. I have been going to the Parade of Homes for the last twelve years but this was my favorite experience- more on that in a bit. My daughter had just ate so we had a three hour window before she would want more to eat. This would be her second time touring homes with me so at four months old, she is already an experienced home shopper. Bringing the baby also allowed me to multi-task; I got a pretty good work-out in carrying her around as we house shopped. I enjoyed her company on my previous outing but she is more of a silent observer and seems to prefer napping. I am told to enjoy this phase while it lasts!
We headed out and I quickly realized that bringing my six and eight year old nieces added an interesting element to the tour. Their insight had me looking at the homes in a totally different light. For instance, the first home had a living room with an oak railing overlooking the main level. My niece informed me that the room was perfect for playing "jail." I don't know what this "jail" game involves but it was definitely a good selling point for the home in her opinion.
Next, we went to the Cobblestone Lake neighborhood in Apple Valley. The advertising proclaims that "Cobblestone Lake offers the nostalgia and stability of old-fashioned traditional neighborhoods" and is "reminiscent of yesteryear." As my sister and I commented how the area does look like grand older neighborhoods, my younger niece pointed out that "the houses can't look old because they are new." Good point! The kids agreed that Cobblestone gets both of their votes because the houses had pretty colors, there is a neighborhood pool and it is close to a HUUUGE Target store.
The girls also were quick to point out flaws that I overlooked. A beautiful tiered front yard seemed like great curb appeal to me. They informed me that the yard "might be good for floods but is bad for babies." They definitely had safety one their minds again when they told me that a sliding door opening up to a not-yet-built deck was a "terrible idea." Bedrooms painted pink and chalk board paint were big hits as were oversized amusement rooms where you could practice gymnastics. The models that served treats were also high on their list.
We made it through seven homes before it was time for my baby's next meal. Overall, it was definitely my most memorable Parade of Homes tour. I just have to apologize to my sister since she had to hear her kids beg her to build a new house the whole way home.