Navigating the Real Estate Market
by Ryan Pezzulo
Attorney at Trainor Law PLLC
As many of us are aware, the real estate market has taken a sharp upturn in the first half of this year. This may be due to pent-up demand as the pandemic seems to be winding down. Additionally, some have posited that many buyers are looking for homes that are more suited to a work-from-home lifestyle. Moreover, government stimulus payments and student loan deferments have increased home shoppers’ buying power. These factors have made the market very competitive for buyers and have increased home prices dramatically.
As a result, buyers are finding it difficult to have their offers accepted and are losing out on homes to other, more competitive offers; even when making offers above asking price. Shoppers should be aware of some tactics that will help set their offers apart from others so that they do not lose out on their dream home.
Inspections
Typically, contracts have an inspection clause that allows buyers to request that the seller either remediate or give a credit for any major issues with the home that would cost more the $1,500 to fix. However, some buyers are upping that threshold to $3,000 or even $5,000 to show the seller that they will not seek to re-negotiate even if there are structural or mechanical issues that need addressing. A higher inspection threshold may make your offer more attractive to a seller.
Financing
Financing is crucial. There are different types of loans, (e.g. conventional, FHA, VA, etc.) and they operate in different ways. Working with a loan officer and choosing the best type of loan that will suit you will optimize your offer. Some sellers are less likely to consider FHA offers because there are stringent inspection requirements, and an FHA loan may result in less money to the seller at closing. Therefore, sellers may be more inclined to accept offers from buyers who are financing with conventional loans. Lastly, we have seen an increase in the amount of people who are making cash offers on homes. This is not always feasible for the typical buyer; especially if you are a first-time homebuyer. However, cash offers certainly are very attractive to sellers as it alleviates the need for a bank and cuts down on fees while maximizing profit to the seller and speed up a closing.
In sum, the market is evolving rapidly and buyers should be equipped with the tools they need to make attractive offers. We represent homebuyers from contract to close and will guide you through each step of the process of becoming a homeowner.
Please contact Trainor Law PLLC if you are in need of real estate legal assistance.
Disclaimer: This article is intended to be educational and is not intended to be legal advice, which can only be given after an attorney-client relationship is established.
