Real Estate advice is everywhere you look. One says this, another says that. Who do you listen to? After all, the wrong advice could easily cost you the house of your dreams.
You may have read a related post, It’s the Agent’s Fault My Offer was Not Accepted. The post outlines the process of what happens to many buyers in this hot, sellers market we are currently experiencing in Oregon. You can’t help but feel sorry for the buyer in this example.
So how do you make sure this doesn’t happen to you? Here is an outline of a successful process when buying real estate in Oregon:
- Complete a consultation with the agent of your choice. Choosing an agent is an entirely different topic, so for now, we will just assume you have an awesome one! (Ok, I have to add something to this point: select an agent that comes by referral of someone you know, or that knows what they are doing. I can’t tell you how important this is. Because when you are competing with 5 other offers, having an agent that other agents like to work with is crucial! If you were the seller’s agent, and you received 5 offers, one from an agent that is notoriously hard to work with, whose offer do you think is going at the bottom of the stack?) This could take place over the phone, in person or via Facetime. Just have one. This will allow your agent to understand your needs and goals, help formulate a plan to get you there and offer solutions you may not have considered. THIS IS A MUST!
- Listen to your agent, they are there to work for you and guide you. Based on the type of property you want, they will be able to give you an idea of the average property values. They can even print out a CMA, or Comparative Market Analysis, to show you what homes like you want have sold for in the last 90 days. Pay attention to this, because if they sell on average in 8 days for 99.9% of the asking price, then, expect to pay at least 99.9% of the asking price. By the way, this number will change based on area, price point, and type of property. In other words, single family residential homes might be selling for 98% of asking price, but at the same time, horse property sells for 92% of asking price. So make sure you are comparing apples to apples! Based on doing this bit of research, you will know a good deal when you see one. Your agent can help review the data.
- Get pre-approved for you mortgage, or prepare your statements for proof of cash. Many people think that because they have bought a home before, or have great credit that they can skip this step. But those aren’t the only reasons to have your mortgage pre-approved. The biggest reason is to prove to the seller that you have the means to complete the purchase. It is very unlikely that the seller knows you personally, and, therefore, has no idea if the bank will give you a loan. The second reason is identify what type of loan you will be using. In Oregon, the purchase contract has you identify what type of loan you will be getting. If you haven’t already been approved for one, what will state on the contract? “I think it’s FHA, but I am not sure?” This won’t sound very confident to the seller, forcing him to look at other offers besides yours. A third reason to have your loan pre-approved is to help determine if you will be folding in closing costs, and if so, how much. This information is required at the time of writing an offer, not after. THIS IS MUST!
- Ok, now that the ground work laid, you can move forward with look at homes for sale. Since you already had a consultation with that awesome agent, they have likely sent you a list of properties that match your needs. If they are super awesome, they have set you up on an auto-notification system so that as soon as a new match hits the market, you hear about it. And, if they are super, super awesome, they have already been asking around the office if anyone has a listing coming up that might work for you too. Let your agent know which one/ones you want to see, and they will set the showing appointments for you. Often times, the owner, or a tenant, lives in the house. If a new listing pops up in your inbox today and it looks good, don’t wait to see it. It will be gone if it’s that good.
- If you find the right house, for the right price, don’t wait to write an offer. Chances are, 4 other people will be thinking the same thing. If you have an awesome agent, they will have a program called Docusign, which allows their clients to sign with a digital signature either in person on an ipad or via email. Either way, there is no printing or faxing involved. This saves hours, ensuring your offer gets submitted as fast as possible.
- Your agent will advise you on writing an offer to increase your chances of being accepted. Price is a big one, but there are other factors that will make it favorable as well. If your agent is awesome, they will already have had a conversation with the seller’s agent to find out if the sellers are in a hurry to move, or need more time to find another house. What ever the answer, write your offer accordingly. Pay attention to the MLS sheet, if the seller is excluding the brand new washer and dryer, don’t ask for them. And on that note, if the listing suggests escrow at a certain company, and your client doesn’t have a preference, go with the one on the MLS sheet. Less waves, less boat rocking. The idea here is to make the offer so clean and irresistible, that the seller can’t resist your offer.
- Always submit a copy of your pre-approval with your offer, or proof of funds when paying cash. Refer back to point #2.
- Every situation is different, but, if the sellers live locally, and you know the offer will be presented that day, don’t extend the expiration date. Leaving it out there for 3-4 days allows the seller to shop for more offers. This can back fire though if the seller is an institution, out of state or on vacation. So, it comes back to how awesome is your agent in finding this stuff out up front?
We may be in a Seller’s Market for the current real estate season, but, that doesn’t mean the buyers are completely at the seller’s mercy. Implementing this 8 points will greatly increase your chances of getting the house you choose.