3 Buying Tips for Surviving a Hot Summer Home Sales Market
If you live in California, Texas, or Colorado, you’re in what realtor.com terms a “hot” housing market right now—one where you may use apps to find new listings, stake out open houses, engage in bidding wars, or make an all-cash offer.
According to RealtyTrac, all-cash sales accounted for 37.9 percent of all sales of single-family homes and condos nationwide in the second quarter of 2015. But that percentage can vary widely by market, it seems: “Cash purchases account for nearly half or more of all transactions in cities such as New York, Miami and Los Angeles,” Jonathan Miller of Miller Samuel tells Forbes.com.
And you’re not just competing with local buyers in hot markets where properties are listed and sold in less than a day. The Miami Association of Realtors®, which tracks visitors to its website by their origin country, notes that the number of foreign buyers is up 40 percent from last year, with 81 percent paying all cash. Top countries include Brazil, Colombia, and Venezuela.
So if you’re looking to buy that dream property, you could quickly find yourself in a horse race against “global buyers who are willing and able to pay cash,” notes Forbes.com.
How can you get an edge and that home you have your heart set on? Forbes.com interviewed real estate experts for their hints. Here’s what they shared.
1. Be Ready to Move Fast
If you’ve made the decision to buy, and have figured out how you’ll pay for the home, time is of the essence. The listing that pops up in your price range and location at 10 a.m. could be sold by noon. If you’re ready to buy, be ready to move—fast. “Cash is important but it means nothing if the buyer doesn’t act fast,” Miami broker Chad Carroll of Douglas Elliman tells Forbes.com.
2. Make a Cash Offer
It’s true, cash talks, especially in real estate, because a cash buyer presents no financial contingency. “Bottom line is, a seller wants to know how quickly they can get their money,” Susan Smith of Hilton and Hyland in Beverly Hills tells Forbes.com. “In most cases the strongest buyers are cash buyers.”
3. Expect to Pay Near the Asking Price
In hot housing markets like Miami, homes are selling at or above the asking price, says the Miami Association of Realtors. “Buyers who present an offer considerably above the asking price may find that the seller is much more willing to give them some time to get their financing in order,” Frances Katzen of Douglas Elliman in New York City tells Forbes.com. Another approach is to show, along with the loan pre-approval, proof of the funds necessary to cover the down payment. “A seller will be more inclined to accept an offer with a financing contingency when the buyer demonstrates sufficient liquidity,” adds Katzen.
Source: “Home Buying Tips That Will Give You and Edge,” by Vanessa Grout, published on Forbes.com on July 29, 2015.