I was comparing notes tonight with a lender friend. After losing out on our third offer with a particular set of buyers (and a VERY solid one, at that), she said the average now is for buyers to lose out on FIVE homes before landing one! It seems almost hard to believe, unless you’re in the thick of it.
Low Inventory + Bidding Wars…Spreading Like the Zombie Apocalypse
Much like the zombie apocalypse of “The Walking Dead”, the disease is spreading. Ballard seems to be Ground Zero, but now even Lake Forest Park is affected. (It’s just that instead of homes selling for 20%+ over asking in Ballard, it’s under 15% in LFP.)
Where–and when–will it end? I wish i had a crystal ball! In the meantime, hang in there, dear buyers. It WILL end sometime. Real estate is always a cycle. Remember back in 2007-2008? And then just about 2 years later when the market was in the toilet? Yes, I know. Doesn’t help if you want/need a house NOW.
So what can you do to better your odds of winning?
- Be pre-approved, or conditionally approved. If you are getting financing, do everything you and your lender can to get you as close to a cash offer as possible.
- Be prepared to waive some contingencies. I am DEFINITELY not recommending waiving the financing contingency, but it does happen pretty often these days. Just make sure that if you do, have a very, very frank discussion with your lender about the risks. Want to waive the inspection contingency? Get ready to shell out for some preinspections. At $300-500 a pop, it’s not cheap. But in this market (Seattle area) at this time, you have basically no shot in almost any case of getting a home with an inspection contingency. Except maybe condos.
- Write that letter. It may be cheesy, and it doesn’t always work (maybe less often than you’d think), but it only takes a few minutes to write up and could tip the balance in your favor should you find a sympathetic seller. Just be careful to mention things like what you love about the house, and less about things like your familial status, race, etc. that could potentially put the seller in an awkward spot.
- Ask your lender to call the listing agent on your behalf. Don’t underestimate the power of a personal call from someone on your side saying, “Yes, they are definitely good for the $$!”
- Keep going. It’s definitely not just you! Anyone buying a home in the Seattle area right now (and lots of other markets across the country) are in the same spot. (Frankly, it seems that spot is Ballard!!!) You WILL find one, it will just take longer, the battle will be tougher, and you’ll spend more to get there. But hey, on the flip side, someday you’ll be on the other side of the table. And finally, if all else fails…
- Find a pile of cash. OK, so maybe I’m not totally serious there. But now, as in always, cash is king. And there just aren’t many sellers who, all other terms being equal, would turn down cash in favor of a financed deal. There is simply just a lot less that can go sideways when it comes to cash.
Good luck out there! Remember to use a good realtor who has your back, and a lender who is willing to go to bat for you every time, too.