By Jane Francis Cross
Charlotte’s real estate market has gone crazy with lots of buyers and no sellers! Bidding Wars are taking place on over 65% of homes listed for sale. If you are a seller, your fear will be that in just one day, you could feel as though you rendered yourself homeless! Suffice it to say, you’ll likely be a buyer, too.
As for you homebuyers, at first, you will go gingerly into the process of bidding at the list price. That seems more than fair. Once you lose that house, you’ll find another one that just listed and you’ll run over there, love the house, and this time you may offer a few thousand dollars over the list price. You lose again. That seems absurd.
Unfortunately, you may do this another four, five or six times. When you finally win the home of your dreams, you’ll be emotionally exhausted, and at the same time, jumping for joy.
How did you finally win that bid? First and foremost, you got tired of losing bids and started to take your Realtor’s advice (and this seller’s market) seriously.
Tip #1: Work with a Realtor that you trust, and therefore, take their advice. They should be well-versed in each of the areas mentioned below and can explain them to you in more detail.
Tip #2. Have a mortgage lender’s letter that says you are qualified to purchase X amount. This loan qualification letter means that your lender has requested a ton of paperwork to prove your income, gathered your tax returns, dug into your debt and literally qualified you for the loan. This is not a pre-qualification letter. A pre-qualification letter is a phone call or an online application where a lender has asked you for your social security number, looked at your debt-to-income ratios, and submitted your information for a credit rating. Your competition may be showing up with a cash offer – those are tough to beat – but not impossible. If you are a cash buyer, you must have a “Proof of Funds” letter in hand so the seller and their real estate agent know you have the goods to close the deal.
Tip #3. Increase your due diligence fee. The North Carolina contract has a due diligence period. During the due diligence period, you (the homebuyer) can decide to walk away from the contract. The due diligence period is secured with a due diligence fee, which the seller will keep if you terminate your contract prior to the end of the due diligence period. The expectation is that if you make your due diligence fee super high, you won’t walk away from the contract. And, if you do, you will lose thousands on your exit. Prior to the end of your due diligence period, you’ll want to get all your home inspections, appraisals, title work, and any other thing you desire, completed to your satisfaction.
Tip #4. Stack the offer in favor of the home seller. This means working on a timeline that suits their needs. Timing includes tightening up the due diligence period and being flexible with the closing date per the seller’s needs.
Tip #5. Limit contract contingencies. Contingencies include lending, inspections, home appraisals, and requests like home warranties and home appliances. You can still get your home inspected and appraised, just don’t expect the seller to fix anything or work with you on a low-ball appraisal. Some will, some won’t. The due diligence clause allows you to exit the contract for any reason at all prior to 5 p.m. on the agreed upon date. When you tour the home, take a close look inside and out, and read the residential disclosures. Ask questions.
Tip #6: No dawdling. Using today’s technology, your Realtor can work quickly, providing you with a comparative market analysis, putting the offer together, and using electronic signatures so you can get your bid in quickly. The Charlotte–area market has been steadily moving forward with less than two months of inventory, indicating that the seller’s market should be here for a good while longer, so there’s no use in putting this off. Take advantage of today’s all-time low interest rates, have fun competing, and when you win the bid, jump for joy. It’s a big deal!
As the Charlotte area’s “Go To” agents and consistent leaders in the luxury real estate market, the team of Carolina Realty Agents at Keller Williams has a reputation for tenaciously protecting their clients’ interests. Jane and her team are dedicated to serving you with savvy negotiation skills, superior market knowledge, cutting edge advertising strategies while providing a very personal hands on approach, keeping you, the client, front and center. Call on Carolina Realty Agents at Keller Williams for honest, insightful real estate advice you can bank on. You can reach Jane at 704-608-0228.