Deerwood Realty and Friends Podcast

A Fortune article has 15 things buyers should be wary of…I’ll react and add one.

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Thoughts:

1.  Beware of Settling for a property…This is tough…especially in todays market.  I see more instances where buyers are just beat up and want to quit the process altogether of finding the “perfect” home.  That doesn’t mean that you should settle…unless you have a particular plan in mind.

2.  Don’t get caught up in a frenzied market…This is a hard one…if you don’t realize you are in a frenzied market, you probably won’t come close to actually buying a house. You must have some sense of urgency…a reason to leave your current living situation to move into a new house…and that’s likely to cause a frenzy…especially when you see houses coming off the market quickly.

3.  Don’t overpay for your property…again, this is easier said than done.  My thought would just be to set your limit.  If the house goes above that limit, you did your best.  Base your limit on the most current and relevant comparable sales.  Winning a bidding war over 40 offers is a pretty good clue you overpaid.

4.  Cap your search as a percentage of your budget.  In this market, this is going to be difficult.  Homebuyers expect a certain level of features at certain prices, and the market is definitely stretched thin in this regard.  Consider someone who bought a house 5 years ago is seeing similar houses go for many thousands of dollars over what they bought but the houses are not improved in that time frame. 

5.  Remain Grounded with what you are able to afford.  Always.  And, if you can’t find anything in your budget, you need to wait to acquire more purchasing power. 

6.  Consider Ramifications of Waiving Contingencies.  I don’t like to see buyers waive contingencies as a buyer’s agent.  Even when I am listing a home, I am uncomfortable by some of the efforts to purchase a house by desperate buyers. 

7.  Understand how a property would fare in Climate Change.  Maybe this is true on the coasts, beachfront property perhaps…in St. Louis, we have flood zones…that’s pretty much all we look out for when buying a home. 

8.  Be Cognizant of Costs after purchase.  This is definitely true.  The chances that you will move into your new home and not have any additional expenses are very low.  Sometimes I think it’s better to make changes before the house is even occupied if you know you don’t like something.  Other times, I think it’s good to wait. 

9.  Budget for more than just the house…Isn’t this one similar to number 8?

10.  Don’t waive inspections  Isn’t this similar to number 6?

11.  Be aware of risks.  Life is full of risks.  Buying a home is no different.

12.  Wait if you can…I don’t necessarily agree with this one.  What are you waiting for?  Prices to go down?  I have buyers that have been waiting 3 years so far…they have lost the chance for massive equity during that time.  Of course, it depends…but if you must buy a home because of your circumstances, do it.

13.  Identify and consider all factors…good luck with that.

14.  Don’t obsess over the “top line” number…I could go either way with this.  I tend to agree with not obsessing on the top line number.  Because, 10 years from now, it’s probably not going to matter.  However, you still want to get some value in today’s market.  You don’t want to just blindly buy.

15. Don’t be flat footed chasing a deal.  I think this is true.  Put yourself in the best possible position to buy a house.  That means having a pre-approval letter.  That means being ready to buy a house…cash in the bank, for example.  As far as different groups having different valuations, I tend to agree with this.  For the non- corporate single family homebuyer, they do have to be able to get an appraisal as a condition of a loan..so they are tied to something.

16.  Short property histories….ever see a house that has sold every other year?  What do you think that’s about?  There’s probably something about the neighborhood that doesn’t end up working out for the buyers…why should you be the next one in?

Source:  

https://www.forbes.com/sites/forbesrealestatecouncil/2021/08/16/15-things-prospective-real-estate-buyers-need-to-be-wary-of-right-now/

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