Advice for Homebuyers: Show Up Early and Bring Your 'A' Game

I’ve been in the business long enough to have cycled through the boom. In fact I learned most of what I know in the Capitol Hill market in the early 2000’s.  Current supply/demand ratios in Nothern Virginia are bringing back memories of real estate insanity. It is a lot like 2005, except that buyers are better qualified and choosier.

The lack of inventory continues to frustrate buyers. Inventory is lower than it was in 2005 and interest rates remain at historic lows. If a property is priced right, in a good location, and in good condition, sellers are seeing multiple offers, escalation clauses, and waived contingencies.

Here is some advice on navigating the market.

SHOW UP EARLY !

Buyers (with the help of an experienced agent) must monitor the listings daily  - even twice a day – and be prepared to see the home right away or within a day or two.  This is not a market when you can “wait until the weekend.”

As an example, I showed a house on Friday at noon. My client wanted to think it over and talk to her parents before deciding on an offer.  By the time she contacted me Monday morning to say “I want to make the offer,” the house was already under contract and there had been multiple offers.

Another example – this time my client was successful.  After dropping my son at school one day I drove past a “Coming Soon” sign.  I called the agent and she said the house would be going on the market in a few days.  I notified my clients and we set up an appointment as soon as it was listed.   I helped my clients understand that there would not be time to think about it – if they were interested we had to move right away.  We wrote and submitted the offer that evening. By the next day there were 3 offers already after less than one full day on the market.  My clients had a very strong offer and theirs was accepted.

BRING YOUR "A"GAME

Being prepared is as important as moving quickly. Selecting an agent, getting pre-approved, and having your financial plan in place are all key elements of being prepared.  Don’t wait until you have fallen in love with a house to select your real estate agent.  It is wise to sign an “Exclusive Right To Represent Buyer” agreement with an agent you have selected.  When an agent is listing a house, he or she represents the seller – and can only also represent a buyer in the same transaction by becoming “neutral.”  Agents are required by law to disclose to you whom they represent.

Get recommendations for mortgage lenders and shop loan programs before you look at homes.  You will want to know what your financing options are – Conventional, FHA, VA, 30 year, 15 year, 203K construction?  What are the rates and how long can you lock?  How much do you qualify for?  What will the payment look like?  In this market, there is no time for this research in a competitive offer situation.  What many people don’t know is that the financing terms are spelled out in the contract.  When a buyer makes an offer in Virginia, when it is signed by the seller it becomes a legal contract.  If that contract details a certain loan program, you can be at risk of default if you change the terms or the lender or even the program.

Last example – just something that happened  that seemed staged or out of movie.  I showed a house in South Arlington on Sunday morning prior to the scheduled Open House.  My clients really liked the house and were contemplating an offer. While I was there with my clients, a couple walking their dog came up and rang the doorbell.  The man tried to hand me a stack of papers saying “here is an offer to purchase this house.”  Since I did not represent the seller, it was not appropriate for me to see that offer, so I put my hands behind my back and explained that I was not the listing agent and that he should come back during the Open House.  As I was driving away I saw the man slip the offer through the mail slot!  I could only envision any other realtors showing the property stepping all over the offer. 

These are crazy times.  If you want to buy a house, show up early – and bring your best game!

Catherine Jouet has a diverse understanding of home sellers, buyers and investors in the North Virginia and Washington, DC markets. Licensed in VA, MD, and DC, Catherine is a resource for all of your real estate needs.

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