Thursday, July 6, 2023 / by Amy Brown
It's all about trust and knowledge. Trust me to do my job and I will give you the knowledge of market conditions and expectations on what is available and what that looks like.
1. When you see a home that you like, schedule the showing NOW, not in a day or two. The house will be gone! If you are from outside of the area, allow me to do a virtual showing for you either through FaceTime or Zoom and be prepared to make an offer that day. I know that this is a big decision but this is the reality for long distance buyers in today's real estate market.
2. Offer needs to be from slightly below to above list price depending upon the market conditions. How much is enough? That depends on your comfort level and financial position but be prepared to start fairly close to list price and go above by 3-5%. Everything depends on how many offers are on the table already, the number of days on market, and your desire to have that house.
3. Due diligence deposit needs to be considerable. How much is that? Again that depends on your comfort level but it needs to be an amount that peaks the seller’s interest and makes them want to choose you. Remember, this is the seller's non-refundable reassurance that you are serious about the purchase and will be the amount that is most important to them. Putting some “skin in the game” shows the seller that you are going to be the buyer that is more likely to consummate the sale. There is no standard but I would suggest between $2,000-10,000 or even higher for luxury properties.
4. Earnest money deposit also needs to be considerable. This amount is refundable to you should you back out of the contract before the expiration of the due diligence period. This is considered your "good faith" deposit and the higher the amount, the more "serious" you are considered as a willing and able buyer. My suggested amount is 2X your due diligence deposit.
5. Keep your dates short. Sellers want a fast turnaround. Keep your closing date to 30 days or less and keep your due diligence period (the period where you can pull out with minimal financial penalty to 2-3 weeks).
6. No contingencies! This is a market where no seller is going to accept an offer contingent upon the sale of your home somewhere else. Why is that? Because they don’t have to. This is one of the hottest real estate markets in the country and if you don’t buy the home then someone else will. Sellers don’t need to accept the risk of their deal falling apart based upon a home sale in another region. If you need to sell your home in order to purchase another, then my suggestion is to sell it now and rent until you find the home for you.
7. Have your financing in place and ready to go! A proof of funds letter or preapproval letter from your lender is going to be REQUIRED by any seller in today's market and must be submitted with the offer. Know what you can afford PRIOR to shopping for a home. Nothing is more disappointing than finding the home of your dreams, having to wait on financing approval, only to have that home go under contract with a buyer that had their documents ready.
1. I'm not comfortable buying a home without seeing it first - this is completely understandable. It is a really big decision and one not to be taken lightly. However, the buyers that saw it yesterday are making an offer today and as I have seen time and time again, sellers don't wait! Either clear your schedule for the day so that you can see the house or know that if I do a virtual tour for you, it won't just be of the house itself. We will be “live” together on the phone so that you can ask questions and we can drive around the neighborhood. There are also many resources such as google maps where you can "virtually walk" the neighborhood as well. Use technology to your advantage and know that I am going to do a very thorough job to make sure that you have all of the information.
2. I don't want to overpay - Market value is defined as what a ready, willing and able buyer is offering to pay for a home. As you can see, we have many of those here! A $750,000 home in Asheville is not going to look like a $750,000 home in Minneapolis and it is not going to be valued the same. Value and price are location specific. As long as we have buyers willing to pay market price then you will need to match that price or above in order to secure that home for yourself. Take "value" or "worth" out of your vocabulary as it pertains to the mass market. Those words have a different significance for different buyers and pertains to an emotional response, not a financial one. Regardless, I will run all comparables for you but more than likely the home will be priced at the highest end of the comparable value.
3. But the tax value is only... - Homes in NC are not reassessed with every sale the way that they are in other states. Tax values are assessed every 10 years at the top of the decade. We just had an assessment in 2020 and will not have another one until 2030. Also, the tax value is defined as the financial worth as determined by the local governing tax authority and has no bearing on market value (what a buyer is willing to pay). Therefore, the tax value is irrelevant. The only qualified person who can truly tell you the financial value of a home is a qualified appraiser.
4. But the house still needs a new (kitchen, bath, HVAC, etc.)... - Homes in WNC are older; that is a fact. This city came to its heyday in the 1920s and many of these homes still have antiquated furnaces, no A/C, or need some type of renovation. As long as people continue to buy homes with these features at these prices then they will continue to be sold in the same condition. Go ahead and get prepared that you will need to do some kind of work to the home to make it your own and make sure that you have set that money aside in your budget. Also, know that it is a large part of my job to connect you with reliable contractors to get quality renovations completed and that I will be here to help you through that process as well.
5. I can already see a lot of things that need to be fixed - Remember that we first have to get the home under contract for you, then we go into a second round of negotiations for repairs. Your offer price is not the final price! After inspections are completed, I will negotiate either a credit at closing or repairs to be completed prior to closing, as you desire, in order to get the home closed at the highest quality or lowest price possible.
These are my promises to you! If you will aggressively jump on new listings that you like, then I will take care of the rest and negotiate the best possible deal for you...but you have to give me a chance to get you to the table first!