It’s not easy being a buyer in the current real estate climate where sellers have the clear advantage. Today’s market pace is fast, and competitive bidding is furious: there simply isn’t enough product to meet buyer demand. Within days, a listed property has an competitive bidding over the asking price with multiple back-ups. What’s a buyer to do in this tight market?
Be smart. Be armed. Be flexible. Stay focused. A smart buyer recognizes the value of a real estate professional. Be loyal to your broker, so your broker will contact you with immediate information on offerings, price reductions, and units coming back to market. Ask your broker to organize and make sense of the numerous and over-crowded Sunday open houses by weeding out those properties that aren’t right for you. Surfing the Internet for properties works best when it’s a collaborative effort with your broker.
An educated buyer is one who is prepared to act quickly and decisively. Financing pre-approval is a must in this market. If you can gain the confidence level to remove the financing contingency from your offer, you will gain a considerable advantage. Take the time to prepare a professional and financial profile that will give substance to your bid. Determine the seller’s time frame and express your own flexibility with respect to closing and occupancy. A skillful broker knows how to communicate effectively on your behalf to present your profile to its best advantage.
In a competitive bid situation, put your best foot forward immediately to knock out other contenders. Since you may not get a chance to negotiate, you’re not really bidding against yourself. It’s OK to lose an apartment because you’ve chosen not to go beyond a specific dollar distance. But it’s not OK to lose a property because you’ve delayed. In a competitive environment, go to the last dollar beyond which you would not kick yourself for having lost the apartment: go to the last dollar at which you’ll feel good about entering into a contract of sale. If you’re overbid, there will be disappointment, but no regrets. Be prepared to pay as much as 10% over the ask to secure the property. If your bid is accepted, instruct your attorney to complete his due diligence promptly. With back-up bidders breathing down your seller’s neck, a delay could cost you money and the apartment.
If your bid is accepted, expect that malady known as “buyer’s remorse” to overcome you within 12-24 hours. Occurring in buyers’ and sellers’ markets alike, this affliction disappears with appropriate hand-holding from your broker. 2004 is stacking up to be a banner year for real estate, and if you’re counseled wisely, you will be among the victors.