Welcome to North Texas. The year is 2013 and the real estate market has never been hotter. Why, you ask… Low Housing inventory and record breaking low interest rates is the reason. Even as the rates tick upward you should understand that since 1971, interest rates on a 30 year mortgage have never been under 5% like they have been since 2010. This has been a three-year run like none ever! Should you decide to become an active buyer, I, a North Texas REALTOR, have three tips that will help you procure the house of your dreams in such a hot market.
Tip 1: Get prequalified before house hunting. Even as you surf the internet to begin your search on your favorite real estate website or app, almost all of your top picks are being shown to other active buyers. The competition in this market is fierce between buyers. We are no longer in the market in which you can find the house that you like on the internet, take the time to get prequalified for it, contact a realtor for a showing, and place your offer. Many times I have been contacted by a buyer about a specific listing only to check the MLS and see that an offer has been accepted on it. Keep in mind that most consumer websites are not able to keep up with the MLS. I see listings all the time that show active on some of the biggest house hunting websites but have actually been under contract for longer than seven days. This brings me to my second tip.
Tip 2: Get a “prospect gateway” set up with your realtor. Prospect gateway is a tool that Realtors use to update our active buyers about listings that meet their specific criteria. It lets you know when new listings that meet your criteria come on the market; it gives the ability to receive pricing updates, and the ability to know when a house goes into an option period. The best thing is that it updates automatically, so you do not have to continuously ask your Realtor to send you new listings. You can even ask your Realtor to set up multiple searches for you. This completely trumps the information that you would get off of your favorite house hunting websites. Remove yourself from behind that 8-ball and get this done!
Tip 3: Mentally prepare yourself for a multiple offer scenario. A multiple offer scenario can also be described as a “highest and best offer” situation. This means that several offers were received on this property and that the seller is leveling the playing field by asking all parties to submit their best offer by a specific deadline. After that deadline, they will pick a single offer to work on. Just know that if you come across a listing that seems like a great deal, you probably aren’t the only one that thinks so. So avoid the low offer. Many sellers are getting full asking price and even more in most cases. But if you’re high offer gets excepted, will you be overpaying?
Unless you are paying cash, a home appraisal has to be done by your lender. The appraisers job is to inspect the quality of the property and see that the agreed-upon sales price is fair based on the comparables. You may have a problem throwing out the comps and bidding high, but with appraisers in place you will only pay the appraised value if your offer gets accepted. With this in mind, consider it a win win. The seller is happy with you as a buyer, and you get the home that you want ahead of other buyers and are not overpaying for it.
So here is a recap:
1. Get prequalified beforehand.
2. Get set up on Prospect Gateway.
3. Mentally prepare yourself for a multiple offer situation, and don’t be afraid to bid high!
Happy house hunting!
Tommy Wooten, MetroTex YPN Vice Chairperson