I’m A Frustrated Home Buyer! What Do I Do In Today’s Market?


Spring/Summer of 2013 is turning into one of the most frustrating home buying seasons for buyers.  Low interest rates, super low housing inventory, and incredibly hyped media reports are making it hard for willing buyers to successfully get into contract on a home.  If you’re frustrated at the whole process, and believe your current efforts are futile, I have a few suggestions.  These tips are no guarantee you will be successful, but it will help you be competitive on all of your offers.

Make Sure You Are “Buttoned Up”!

We’ve talked about this before.  Make sure you are officially approved for a loan.  This means all of your paperwork has been submitted to your lender, and it has been properly reviewed.  You’re probably competing with buyers who want to purchase with all cash.  So, if you do have a loan, you want to assure the seller that you can close it quickly.  I recommend including any documentation from your lender that shows an approval from them.  Also, you can have your loan professional be available to talk with the listing agent to answer any of their questions.

You also want to make sure you have a very clean offer package.  Include a summary of your offer to make it easy for the seller to compare it to others.  Here is a link to our post “What Is Included In Your Offer To Buy A House?”

Shorten Your Time Periods

I hate to even suggest it, but in a competitive market you have to consider everything.  Work with your real estate and loan agents to see if you can shorten the time periods of your contingencies (inspections, appraisal, loan).  You are likely competing with buyers who will be putting in offers with NO contingencies.  I don’t recommend doing that unless you are an experienced property buyer with the resources to deal with any significant property issues.  I do recommend shortening your contingency periods to timeframes that are aggressive, but still allow you to do your proper due diligence.  The only way you can do that is by working with your agent to see how quickly inspections can get done, when an appraisal can be completed, and what your lender turn times are.  Be aggressive, but you need to know what you are buying.

Know The Pricing

You know it’s a crazy market right?  So you should already know that you’re not going to get a property for under the listing price.  In today’s market don’t even bother starting with a low-ball offer.  You won’t get a chance to counter up.  Again, make sure you and your agent do your homework on pricing.  In addition to looking at the comps, make sure you look at the percentage of the listing price for that area.

Once you’ve come up with a pricing strategy for the home, it’s now time to get aggressive.  Talk to the listing agent to see how the seller is going to handle offers.  Are they looking at “best & final” from the start?  Or, are they going to take the top few offers and then counter back? This is where a good real estate agent shines, as they will be able to easily present this information to you.  If they want “best & final” upfront, they go for it with the best you can do (and are comfortable with).  If they will be countering back, be aggressive, but leave a little on the table for a counter.

DO NOT pay more than you are comfortable with.  While you are putting your pricing strategy together, make sure you have your walk away number for that house.  It’s the max amount you are willing to pay for that particular property.  Be committed to walking away once you hit that number.

Let the Seller Know You Want The House

Connecting with the seller might be the one thing that puts you over the top in a competitive bidding scenario.  How do I do that you ask?  One way is to write a great “Dear Seller” letter with your offer.  Check out this post on tips for writing your letter.  Also, if you get a chance to meet with the seller during an open house (or private showing), definitely spark up a conversation.  If you can find common bonds (school ties, common friends, etc.) even better.  With all other things being equal, your offer has a better chance if you have connected with the seller.

Should You Gracefully Bow Out (For Now)?

So this might be disappointing to some who read this.  For some buyers, this might not be the right market for you to buy in.  If you have a small down payment (usually less than 20%), you might have a tough time on your offers.  Also, if you’re undecided on the type of home or the area you’re interested in, this might not be the time for you.  If you’re in this boat, it might be better for you to take a step back and reevaluate.  It might be a good idea to try and save up more money for a larger down payment.  Keep monitoring the market, and educating yourself on the process and what you’re looking for.  When the time is right for you, be ready to strike again!