As interest rates begin to inch up, realtors say homebuyers are increasingly joining the hunt before the market takes off even further.
“I feel like we may have missed the boat because things have changed so quickly,” said Jon Popa, one of the many residents looking for a home.
Realtor Bob Edmonson says the Dallas/Fort Worth market turned in January. He reports low inventory, higher prices and interest rates on the rise.
“I heard an analogy that interest rates are much like a beach ball being held under water. It's just a matter of time before they spring,” said Edmonson.
Edmonson has seen bidding wars with six buyers after one property. He said homes have sold after being on the market for just 24 hours. Popa walked in a home on day one only to run into the new owner.
“We walked up to the door and he said, I just bought that. Somebody has the inside track and finds out about it before we find it,” he explained.
Popa has offered and lost out on four homes. He said he realizes this new market calls for new tactics. Edmonson says if you can offer all cash, often you can buy in cheaper, because the seller knows you will close.
Plus keep it simple, up front, to make your offer more desirable.
“Don't ask for the washer, dryer, trampoline at this stage," he said. "Negotiate it later.”
There's no time for games, in a multiple offer market. Give your strongest offer. Offer the lease back up front.
“They're going to want it anyway. They're so worried about deals not closing on schedule and having a van full of their furnishings and then the deal falls through,” Edmonson said.
Do a flip flop.
“Flip the option fee and the earnest money that you're writing into the contract,” he said.
Your $200 option fee becomes $2,000, and your earnest money bumps down to $200.
“That money is at risk, if you don't close you're going to lose that option fee, but it tells the seller you're darn serious. And when they are comparing your offer with others that goes a long way. Even if the price isn't as high, sellers don't want to drag things out for 60 days.”
And when you hear the words give us your final and best offer, in a multiple offer situation. Get creative.
“The buyer can offer to pay the title insurance premium,” said Edmonson.
Edmonson doesn't make a habit of that, but used that tactic last week to win the deal.
For Popa, it's a frustrating, emotional and time consuming process.
“Now you wonder, gee, now you think back maybe that home wasn't so bad. We were a little too critical,” he said.
It's a fine line.
Being quick enough to decide and taking your time to do it right. It's a gamble that sellers are loving these days –– that is until they become the buyer.