Are You Prepared to Beat Out the Competition?

2013-08-04T10:00:00Z Are You Prepared to Beat Out the Competition?Michelle Krueger Times Correspondent nwitimes.com
August 04, 2013 10:00 am  • 

Anyone can search for a new home online.

For starters, the local MLS (multiple listing system) is open to the public at gniar.com, the Greater Northwest Indiana Association of REALTORS® website where you’ll find a great deal more valuable real estate information. Plus, there’s the Homes page on nwi.com and the landing pages of local real estate offices, brokers and agents, Zillow, Yahoo! Real Estate, Trulia, Realtor.com, Homes.com, Redfin and more.

But, while these sites are informative when it comes to previewing and comparing homes and their features, nothing beats the personal guidance of a local real estate professional when it comes to navigating what could become a very time-sensitive and complex transaction. One misstep and someone else could potentially end up owning the home of your dreams.

It’s a fact. Home buyers have been finding themselves in bidding wars all over the country for many months now. In 18 states, 69 percent of homes on the market fielded multiple offers in June, according to real estate brokerage Redfin.

The best strategy for taking the competition head on and winning a bidding war without over paying is knowing as many facts as possible about the local market, the house you have your heart set on and the real estate negotiation process.

That information is readily available when you contact a realtor. Along with searching property listings, you can also find the right real estate professional for your needs on GNIAR’s website. Here are just few ways you’ll benefit from the services of a Realtor:

While the Internet is a great place to look at pictures and read descriptions of homes within your price range, a realtor has access to real-time data not available to the public including the very latest listings, special disclosures, which homes are under contract, selling prices and more. Thanks to their networking prowess, they also often have the inside track on other details such as the number of showings and feedback from other agents.

All of this information can prove to be extremely helpful in a competitive situation, and odds are, if you’re planning to buy soon, there will be others looking at the very same property.

A realtor will also tell you that since the market has heated up, it’s important to ensure your offer doesn’t insult the seller. The days of making a low-ball offer to see where it leads are behind us. When it comes to price, you need to be realistic and make the first offer as high as you can possibly go.

Otherwise, there’s a chance you will risk losing out to a higher bidder, and the realization that you would be willing to pay a higher price will be too late.

At the same time, it’s extremely difficult to know where negotiations might lead price-wise. That’s why it’s always best to determine a “walkaway number” and stick with it.

This should actually be done during the preapproval process, when your lender sets the maximum amount you can borrow based on your down payment and financial situation. Unlike years ago, more and more people are realizing that the maximum may be more than they are actually prepared to pay for a home. Along with the amount needed to pay your mortgage every month, consider insurance and taxes if they aren’t included, repairs and maintenance as well as other living expenses such as commuting to work, eating out and taking an annual vacation if that’s important to you.

One general rule of thumb is to keep all your monthly home-related payments around 36 percent of your gross monthly income.

Beyond price, a realtor can shed some light on the kind of terms that could make or break a deal for the seller. Being flexible on terms can set your offer apart, so it’s important to let the seller know if you are willing to discuss things like closing dates and moving arrangements. Some people are more than ready to move on and want to close a sale quickly and painlessly, while others may want to remain in the house until they secure another or for other reasons such as the end of the school year.

Because the nature of a bidding war means someone will win while others will lose out, more and more buyers – especially those who have been on the wrong end of a bidding war a time or two or more recently – are realizing the need to move quickly and make a strong bid. While there's no foolproof system for negotiating a fair price, a professional realtor is an important intermediary when it comes to reaching a mutually acceptable price as well all the terms that will meet the needs of both buyers and sellers.

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