When Buying in a Buyer’s Market here’s What to watch out for.
So you are a buyer in a buyers market – what an excellent time to be in the market to purchase property! Inventory is available and sellers are looking for you, however there are still items you need to watch out for to protect yourself and to make the most of your home-buying investment.
Just because it is on the market doesn’t mean it is for sale!
This can be a difficult concept for many buyers to understand but should be one you are familiar with. While foreclosures and short sales are a great way to purchase property at below market value, the reality is that unless a qualified agent is handling these properties the chances of closing go down considerably.
When looking to purchase a short sale or foreclosure you should discuss the following with your agent:
Multiple Contracts – When you are purchasing a home and put it ‘under contract’ you should be the only buyer pursuing that property. If the listing agent will be submitting your contract as one of many, to the lender or even worse signing multiple contracts, you are in essence entering into a blind auction for real estate. Unless you are an experienced investor, this is likely a situation you will be uncomfortable in. Think twice about whether you wish to be in a bidding war when you hear this is happening.
Inspection Allowances – Regardless of what type of property you decide to purchase you need to make certain you have the right to have a professional fully review the property and report to you their findings. This is critical.
Submit a Strong Contract – treat a short sale or an REO like and other contracts and put your absolute best offer forward. If you truly want to purchase the property in question make your offer count. The days of low-ball offers are over.
Pre-Qualification is More Important than Ever
In today’s market any seller will want to see that you are a strong buyer and have been fully pre-qualified with financing. You will want to meet with at least one (if not two) mortgage brokers or lenders to get pre-qualified. You will want to make certain you are comfortable with:
- The Mortgage Program
- Your Monthly Payment
- Any Projected Payment Increases
- Payment or Interest Rate Adjustments and Time Periods
- Laying out a financial strategy prior to finding a home allows you to confidently target homes in your price range.
Hire an Educated Experienced Agent
A short sale or foreclosure purchase is not a typical real estate transaction. They can be difficult and come with their own specific challenges however the right agent can help guide you through this process and help you purchase the property you are looking for. You need to have a well trained agent such as a CDPE (Certified Distress Property Expert) who has taken hours and hours of specialized training to assist you, and you need to look no further than here, as I offer this designation and background for you. My contact information is to the right of this post and you can reach me by phone or email. I’m here to help you through the purchase of any distressed property you see out there.