It’s been a few years since the 2007-2008 financial crisis and many markets across the United States, especially here in my neighborhood of Beacon Hill, have bounced back stronger than ever. In all neighborhood of Boston we’re seeing local real estate markets with appreciating home values, low inventory, and buyers facing stiff competition. Whether it’s a Boston high rise condo
or a first time condo buyer in Beacon Hill.
A hot real estate market can be great as a Beacon Hill homeowner
. Boston condos are taking less time to sell and many sellers are getting close to, or even above, asking price. As a Boston condo buyer,
though, it can be quite challenging, especially as a first time homebuyer
. So what can you do as a buyer to compete in these hot markets?
The first and most critical step to being in a competitive market is getting pre-approved. As a Boston condo buyer, you may find yourself wandering into open houses or wanting to look at properties and locate a home before worrying about the financials. After all, looking at homes is the exciting part and no one likes dealing with paperwork. However, this approach can be a huge mistake and you may risk missing opportunities. Before browsing Boston condos for sale
speaking with a lender can be a great way to start getting an idea for neighborhoods and what you can get for your money in different areas, but if you are in this stage, you are not what is considered a “ready buyer”. When you’ve found a home you’re interested in and it comes time for offers, things move very quickly. This is especially true in a hot market and it is important to have all your ducks in a row before submitting an offer. Having a pre-approval letter means that you have already been approved up to a certain amount for a loan, contingent on an accepted offer. This not only gives you as a buyer a number to keep in mind when searching, it also helps your real estate agent, as it is important that you only see homes that are within your approved price range that you are able to make an offer on. The pre-approval letter shows the seller that you are already qualified for a loan which means it is one less thing for the seller to worry about throughout the transaction. Put yourself in the seller’s shoes to really understand how important this step is. Would you, if you were selling your home, want to take your home off the market for a buyer who may not even have the ability to qualify for a loan and close? Probably not.
COUNTER OFFERS AND MULTIPLE COUNTER OFFERS
If you find yourself in a situation where you have submitted an offer and are competing with others, it can go a few different ways. The first option a seller has is to accept or counter what they consider the strongest offer, therefore rejecting all other offers. If you are one of the rejected offers, there is not much you can do at this point except hope that the offer doesn’t get accepted and the seller will consider your offer as a back up. The second option they have is to counter a select few of the stronger offers. What happens in this case is all other offers are rejected and the select few receive a multiple-counter offer, meaning the seller is countering the submitted offers and they go back to the buyers. Typically, in this situation, the seller will ask the buyers for their “highest and best”, or their strongest offer. In this scenario, the buyers are all competing against each other. The last option a seller has when receiving multiple offers is to multiple counter all the submitted offers. Again, in this scenario, the seller of a Boston high rise condo
will typically be asking all buyers for their “highest and best”. To be competitive in hot markets, you may want to consider coming in with your “highest and best” offer in the beginning. Leading with a strong offer may be enough for the seller to not bother countering any other offers and give you the opportunity to negotiate between you and the seller. The important thing here is that you want to have a “highest and best” in mind, and you do not want to find yourself in a situation where you are stretched beyond your means as other buyers bid the property up.
STRONG TEAM AND COMMUNICATION
Once you reach the point where you have an accepted offer on your Boston high rise condo
and have opened escrow, continue to show that you are a strong buyer. Make sure that there is open communication between you, your agent, your lender, and anyone else that may be involved in the transaction. Having strong communication between everyone on your team will help to ensure that everything goes smoothly and that no balls are dropped. Also, be aware of all the timelines. Once an offer has been accepted, there are many moving pieces that all need to fall into place before the transaction can close. Minimize headaches and delays by completing necessary paperwork in a timely manner and taking care of things such as home inspections and appraisals early on.
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