With that being said, I feel it is necessary to give a heads up on buying in Houston today - particularly if you choose to buy inside the loop. Here's the scoop - things move quickly. This is especially true if you are one of a large number of buyers who is searching for the same house: a 3 bedroom, 2 bath, 2 car garage on a full sized lot with a yard, priced around $350K. This is the standard request I get from almost every first time home buyer looking to purchase inside 610. The inventory for this home is extremely low, and the demand is remarkably high. What does that mean? When one of these comes on the market, you will need to be prepared for a multiple offer scenario. You will also need to be prepared to place an offer on it the same day it hits the market, and, likely start your bid at full list price. For example, the houses I list have, for the most part, all gone "option pending" (meaning a contract has been executed) the first day they've hit the mls. This includes listings outside the loop - in Pearland, Friendswood, etc. - which shows that the upswing in buyer interest is not exclusive to the inner loop.
If a buyer is willing to sacrifice on certain criteria such as lot size, garage, number of bedrooms or baths, then it will open up options, and, perhaps level the playing field. If the criteria simply cannot be changed, then it would be a good idea either preparing to pay over list price, or purchasing a home that could use some work. Homes that have an odd layout or are in need of some tlc are typically priced a bit lower. Keep in mind, purchasing a home with an odd layout will likely affect its future resale value, as layouts are difficult, if not entirely impossible, to change. In that case, depending on time and budget constraints, considering the purchase of a home that fits all the requested criteria but is in need of some "refreshing" could be beneficial. Depending on what a homeowner does to spruce up the home, updates can increase the resale value. Also, if you are one of several bidding on an already updated home, then you could end up paying at the top of market value, or, in some cases, over market value, which means you could end up with the home you want right now, but a potentially difficult future resale.
If you find yourself in a multi-offer scenario, consider these options to make your offer more appealing:
- Include a personal letter to the seller - you would be surprised by how often this can push a buyer ahead of the pack, especially if there are only a couple thousand dollars difference between offers.
- Remove any requests for seller's contributions - in any scenario this is a negative, but it will especially work against you if you are up against other potential buyers.
- Request a shorter closing date - in today's market, people will request 45-60 day closings. You can make your offer more appealing with a 30 day close.
- Increase earnest money - The higher your earnest money offer is, the higher your risk. This shows the seller you are serious about the house.
- Pay cash - this removes the lender required appraisal which is appealing to a seller, however, a cash purchase is not an option for most,
Danelle Reed, ABS, GREEN
Martha Turner Properties