Many real estate professionals exclaim that they’ve never seen anything like the 2021 housing market. Thanks to a nationwide shortage, properties are selling for thousands over the asking price and sometimes being snapped up within hours. According to the National Association of Realtors, the median price for existing homes increased by 23.6 percent nationwide in May, compared to last year, and properties typically sold within 17 days.
So, what’s a buyer to do? Susie Siemiontkowski, Realtor and new home specialist with Coldwell Banker Alfonso Realty; Thad McIntyre, broker, owner and Realtor with Powermark Properties; and Maria Salter, Realtor with HL Raymond Properties, answer your burning questions about succeeding in a seller’s market.
Is it ever wise to buy sight unseen? Why or why not?
Siemiontkowski: When it comes to new construction homes, I would say in a hot market and on a deadline, yes. I would be a little more cautious with an existing home. Before deciding, I highly recommend reviewing the property condition disclosure statement and asking your real estate agent for a virtual tour.
McIntyre: During these crazy times, yes, it’s ok to buy sight unseen. We all go on Amazon and sites like it to purchase items without seeing them first. Also, many military families buy overseas without seeing the properties. It’s just important to have an agent do a video tour and answer any important measurement questions, such as, “Is the bedroom large enough for a king bed?” or “Will the laundry room be big enough for a dog kennel?”
Salter: Only if you have complete trust, respect and confidence in your Realtor … honestly, I don’t recommend it. Seeing pictures of a property can be deceiving. As a Realtor, I would not want to make that decision for my client.
How do you know it’s the house for you?
Siemiontkowski: Firstly, you walk in, and it feels like home — but then there’s location. You can’t move a house, so if the home needs a little work, create a list, and see if it overwhelms you or your budget. If not, it may be the one.
McIntyre: This question is almost a loaded one. The right house just “speaks” to you. You feel a connection to the house, and then it becomes the right home for you, and you become the right homeowner.
Salter: Most people have a feeling when they walk in; they know right away. You can just “feel it.” Whatever “it” is, the buyer knows it.
What’s your best advice for making a good offer in this market so you don’t pay more than the home is worth?
Siemiontkowski: My best advice is to shop at or a little below your all-in budget. Finding a bargain is tough in this market, and shopping a little below helps you be prepared for a multiple-offer situation.
McIntyre: In this market, there is no such thing as too much. Offers are based on what the seller wants to accept and whether they will negotiate on things that need repaired, etc.
Salter: I would say, don’t lowball. If you want the property, make a legitimate bid. Offer full asking price, or a little above (a little above if you need closing costs).
How do you close the deal in your favor when you know it’s the house for you?
Siemiontkowski: Be prepared. Have a good deposit and pre-approval letter and determine a max-offer amount in case you are in a bidding war.
McIntyre: Always offer list price or higher, and have money in the transaction, such as not asking for closing costs (or) repairs from the home inspection.
Salter: Again, don’t lowball the offer. If you really want a particular home, don’t waste your time submitting a below-asking-price offer. This is not the type of market you want to risk losing your dream home over coming in low on an offer.
How much compromise is too much on your wish list?
Siemiontkowski: When the repairs and renovations go well beyond your means
McIntyre: I think this question is personal. If you are willing to negotiate, then do it — but remember that you have standards that will or will not be met. Is this your first home? Then maybe you will give on a few of the items. Is this your final home? Then stick to your guns and get what you want.
Salter: What can’t you live without? Put features into categories of must-haves versus nice-to-haves. Families with dogs won’t compromise on fenced yards but may compromise on a pool or a fireplace.
What’s the biggest mistake you see buyers making, and how can it be avoided?
Siemiontkowski: Not contacting a lender first — why look at homes you can’t afford or those that don’t fit your needs because you aren’t sure what your desired payment amounts to in the total home amount? Once you’re pre-approved, you will know what to look for.
McIntyre: In today’s market, the biggest mistake buyers make is expecting everything from the seller. We aren’t in a buyer’s market, so don’t ask for something that another offer won’t ask for.
Salter: Not being pre-approved before they start looking — buyers may shop too high and get disappointed once they find the home they want only to learn they are not eligible for that much of a loan. Always get with your lender before you start looking.