4 Tips for Buyers in a Smoking Seller’s Market

We’ve been complaining about a lack of inventory for a while now, but recently, the market has been behaving in a rather frenzied way, all benefiting the seller. In the close-in Bethesda/Chevy Chase/DC market, the well priced and well-appointed homes are receiving multiple offers within days of hitting the market.  Used to be that one could wait for the weekend open house.  No more.  So, as a buyer, what can you do to outwit the competition and get your offer accepted?

  1. Work with a buyer’s agent.  When it comes to identifying an agent, a lot of buyers like to sit on the fence until something attractive comes along (not the agent… the house!).  By the time they identify a hot house on the internet, and make a connection with any random agent, the house is gone.  Get someone on your side early in the game, and be prepared to jump.
  2. Get pre-approved for a loan.  It can take a day or more to secure a letter from a lender.  Sometimes that letter can make the difference between getting a house and losing a house.  Have it ready to go, and make sure to update it once it expires (usually 90 days).
  3. Keep your offer as clean as possible.  By clean, we mean non-contingent. Back in crazed market of 2005, we had one client make 7 offers before hers was the winner.  In order to be competitive, we would routinely pre-inspect a property before submitting an offer.  This allowed us to determine if the house was in good shape before submitting an offer without an inspection contingency. It was expensive and it was nuts.  Pre-inspections might be the way to go these days.  Or, a general inspection might work, whereby you make your offer contingent upon an inspection, but agree to either take it “as is” or leave it.  Financing and appraisal contingencies are difficult to make go away unless you are sitting on a big pile of money. These are all things you should discuss with your buyer’s agent ahead of making an offer!
  4. Be prepared to jump!  Yup- it’s time to drag out that old sense of urgency.  The days of casually viewing properties at an open house are gone.  If a listing comes on the market on Tuesday, waiting to see it until Friday because you want to watch the Olympics is a tactic that will not serve you well.  Ask your buyer’s agent to alert you as soon as something new hits the market, and do your best to see it that day. If you like it, be prepared to write up an offer… that night!

So, how do we feel about this uptick in activity? A little cautious, honestly. We’ve seen our share of distress among home owners that bought at the tip of the market and then found themselves in the position of having to sell just a few years later. It’s hard to advise people to pull out all stops to get a house without our crystal ball on hand. Turmoil in Europe, our upcoming election, super low interest rates, or traffic on Wisconsin Avenue all factor into local housing decisions. Thankfully, we’re operating in one of the few healthy markets in the country. We’ve almost made a full recovery from our 10-15% decline.

The bottom line is, we’re good at telling you how to get a house, but a lot more hesitant about telling you whether or not you should get it.

Perhaps more homes will hit the market once September rolls around?  Hard to tell.  But for now things are moving at break neck speed.  If you are searching for housing in the Bethesda/Chevy Chase/DC marketplace, please get in touch.  We’d love to help.