Home Base: How’s the Local Real Estate Market?
02 Apr, 2014
By Megan McCarthy
The ice had barely melted when our real estate Spring market heated up. Accurately priced homes are going to competing bids within days of being listed. In the Mamaroneck School District, 85 houses were listed for sale since Valentine’s Day. As of March 31, fifteen of these houses reportedly have accepted offers and 27 are under contract. A house on Gerlach Place in Larchmont Village — listed at $575,000 – reputedly had 27 bids! Buyers, who’ve been waiting for more inventory since Thanksgiving, know a well-priced home when they see it.
So how are these multiple offers handled? Two or three offers may be negotiated individually. Beyond that, the seller’s agent usually gives everyone a fair chance by requesting “best and final” offers in writing. This means you won’t be negotiating back and forth with the home seller. Now is the time to offer the top dollar you’re willing to spend, and your best terms and conditions. (More about this in a moment.)
When all the offers are in, the sellers and their agent evaluate them until one emerges as the “winner.” (Let me assure you, we spend a lot of time going over each offer.) What makes for the winning bid? For starters, an all-cash offer OVER the listing price. Solid proof of finances will be required. But most of us can’t plunk down all cash. Favorable terms and conditions can sway a deal in your favor, too. The standard contingencies – for obtaining a mortgage, an appraisal, and for the engineering inspection – allow buyers an “out.” These contingencies make sellers nervous. Therefore, waiving one or all contingencies can help. Of course, waiving the mortgage contingency risks losing your 10% down at contract signing, so be absolutely sure you’re getting that mortgage. I recommend choosing a lender who can not only generate your loan pre-approval, but can also expedite the underwriting process so you feel confident moving ahead.
Other ideas for sweetening the deal may include: agreeing to quickly sign contracts, putting down more than the standard 10%, and accepting the seller’s closing date.
Some first-time home buyers faced with a “bidding war” still offer under the asking price. Maybe they’re in shock that their dream house has other lovers, and it just came on the market three days ago! Needless to say, they don’t get the home. It might take losing a home or two before they understand; we live in a highly sought-after community, and multiple offers on an accurately priced house reflect that fact.
Megan McCarthy, a licensed real estate professional with Coldwell Banker Residential Brokerage in Larchmont, may be reached by email: firstname.lastname@example.org or by cellphone: 914-309-4648