Tips on how to win a bid on a Boston condo for sale
Boston real estate supply is low, which is pushing prices higher. The national median price of an existing home sold in March was $329,100. That’s a 17.2% increase from March 2020.
Buyers who are currently struggling to find a downtown Boston condo are likely to see improvement in the number of choices available to them as more sellers list for the spring buying season,” said Realtor.com chief economist Danielle Hale, in a statement.
That said, the market is still very tight.
He recommends potential buyers take a pause and do a little soul searching.
If you are ready to buy, here’s advice from experts on how to navigate the market right now.
The first thing to ask yourself is what are you paying in rent.
Come up with a number first, said Cooper, founder, president and CEO of Financial Education Associates in Dorchester, Massachusetts. “What you can afford is going to guide not just your principal and interest payments, but taxes and insurance payments.”
Review your existing expenses and debt. There will also be additional costs to consider, like sewer and trash, possible homeowner association fees and a likely boost in utility costs.
Part of your due diligence includes finding a Boston real estate agent who is experienced in both buying and selling Boston real estate. They should also have a strong knowledge of the local community and relationships with other realtors in the area.
Start looking at Boston condos for sale online, including doing virtual tours, even if you aren’t quite ready to begin the process yet. It will give you an idea of neighborhoods you like that are within your budget.
Setting up alerts from Boston real estate websites will also let you know when new homes hit the market in those areas.
As you see homes you like, you can figure out your monthly payment based on the down payment and cost of the house by using a mortgage calculator, which are offered by lenders.
A good knowledge base will help you make an educated decision in a short period of time, which is crucial when homes aren’t sitting long on the market.
A mortgage pre-approval will give you a sense of the amount you are qualified to borrow, what your interest rate will likely be and the amount of your monthly mortgage payment.
However, just because you are approved for a certain amount doesn’t mean you should spend that much money.
The only person responsible for your budget is you
To win over a seller, try to form a relationship with them. That can range from writing a heartfelt letter or having your real estate agent paint a positive picture of you as a buyer.
First-time homebuyers may have an advantage if they are not depending on the sale of a previous home to buy the new one and have flexibility on when they can move in. One option is to rent the home back to the seller while they look for their new home.
While some buyers are waiving inspections, I don’t recommend that tactic since an unexpected repair can put you in a financial bind.
If you have the ability to handle a larger down payment, you could waive the appraisal contingency, which allows buyers to back out if the home is appraised for less than the purchase price. Your mortgage amount will decrease and you’ll have to make up the difference.
In the end, the winning bid usually offers the most money or all cash.
Just don’t let a bidding war lead you to offer more than you can afford.
It doesn’t matter what the highest bid is and whether you can beat that, if you can’t afford it
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Updated: Boston Real Estate 2021