Buying a Home in Today's Market: Move Quickly
Today's market is moving fast; fewer homes, more competition from other buyers. Lately, I find myself counseling buyers that are heavily persuaded towards this house or that house to move fast. "Sleeping on it' usually means a 50/50 chance another offer will come in and now the buyer finds the home is pending (under contract) and no longer available, or now the buyer finds themselves in a multiple offer situation calling for "highest and best", and that usually means the buyer is going to pay more or lose out on the home.
See two Cincinnati real estate market examples; Monroe and West Chester Ohio below.
Looking back at a few months worth of asking vs. sold prices in two different MLS databases I belong to in SW Ohio, I can see the average discount one can expect is around 0-5%. A slightly lower offer may get the seller's attention but very like to generate a counter offer. In the meantime, the clock is ticking and at any moment another offer can come in, complicating the situation, increasing the likelihood of either paying more for the home, or missing out altogether.
My business partner, Greg Hancock, candidly tells people "if you need to sleep on it, take a half hour nap now and get back to me" and though said with a smile, he's serious as a heart attack. Furthermore, take his advice about being pre-approved to the bank.
In the time it takes you to get pre-approved, that home you want will likely be gone. I can tell you that I talk with a lot of our agents in other areas of SW Ohio, Central Ohio, Northeast Ohio, Northwest Ohio and Northern Kentucky and colleagues across the board report the same.
It's different if you've just begun looking at homes, and haven't seen any that really strike you as your potential new home, but when you see a home and are heavily leaning towards it, you better be prepared to move quickly or you'll be back to house-hunting over and over.
Obviously, depending upon your price range, preferred location and affordability of a home will be factors in the market area itself.
Moving Fast in Competitive Real Estate Markets: Examples:
The Cincinnati MLS is currently displaying a mere 22 homes for sale in Monroe Ohio that are priced up to $200,000. Out of those 22 homes, 17 of them include a basement. Out of those 17 homes that have a basement, only 8 of them include a finished basement. Out of the 8 homes priced up to $200,000 in Monroe with a finished basement, only 2 of them have at least 4 or more bedrooms and 3 or more bathrooms.
So, if you are looking for a 4+ bedroom, 3+ bathroom home with a finished basement in Monroe, you should seriously consider a very strong offer right off the get go if you are genuinely interested in one of the selections. You only have a choice of 2 homes at the current time. Do you want to risk losing out by putting in a low priced offer?
In order to compare apples to apples, a search for homes for sale in West Chester Ohio revealed similar results. There are currently 36 homes for sale that are priced up to $200,000. Out of those 36 homes, 19 of them include a full basement. Out of the 19 homes that have a basement, 9 of them include a finished basement. Out of the 9 homes for sale in West Chester that have a finished basement priced up to $200,000, only 3 of them have at least 4+ bedrooms, 3 or more bathrooms.
So, again, if you have a specific type of home in mind and there are only a few that are available, make your first offer your best offer or you might find yourself on the hunt for another home.
Procrastination can be a costly mistake, especially in today's seller's market!