Listing Courtesy of RE/MAX REALTY GROUP REHOBOTH
It was only a few years ago that the last thing a prospective Rehoboth Beach home buyer had to worry about was being outbid. Those were the days when the bottom seemed to be falling out of the Rehoboth Beach real estate market. Anyone brave enough to be looking to buy at a time when the real estate market was frightening most folks away was not only plucky—they were also alone. Sellers who had to move no matter what found themselves forced to accept offers that they knew were well below their property’s true utilitarian value. The only saving grace was that those same sellers could turn around and buy in their new community at the same kind of crazy discount.
That, as they say, was then—and this is now. As the real estate market in Rehoboth Beach continues to revive, sellers’ mindsets have returned to normal. Knowing that their Rehoboth Beach home is a valuable commodity, they demand offers that are respectable. One national survey found that that buyers are acting quickly on the most sought-after homes, and that overall, median DoMs (Days on Market) fell to 32 in March from 40 just a month earlier.
As the spring selling season heats up, some buyers who find the home of their dreams may also suspect that they aren’t alone. It calls for definitive action—and if it looks as if just making an offer might not win the day, some additional action. For home buyers who have a good idea that they must act decisively or miss out, here are some options for increasing the odds that their offer will be accepted:
One tactic to prevent being outbid is to add an escalation clause to the offer. If allowed, such a provision states if the seller receives another offer, then the buyers are willing to increase their own offer to a set price. For instance, a home buyer who makes an offer of $310,000 might include an escalation clause in increments of $3,000 should a competing offer appears, up to a maximum of $360,000.
Since people have different reasons for selling their home, another tactic is to discover what's important to the seller. Perhaps they have a new job opportunity and need to vacate as quickly as possible. Or maybe they have plenty of time, and are holding out for the maximum price. Your agent may have a good idea what is motivating the sellers so that you can craft your offer around their requirements. If a normal schedule calls for an inspection period of 10 days, but the sellers want to move quickly, they may be motivated by a shorter inspection period.
Usually, home buyers find it prudent to keep the upfront earnest money pledged to a minimum, allowing them more leeway in limiting their loss if they decide to back away from the deal. Increasing the earnest money shows the sellers you are serious about completing the purchase. It also subtly affirms your financial stability. An even more substantial demonstration is to become pre-qualified with a mortgage lender. Unless an all-cash purchase is possible, it’s the best way to guarantee you will be able to act quickly. Even if competitive bidders appear, when you are a pre-qualified buyer, you increase your chances of winning out.
When I’m tapped to act as your buyer’s agent, I become your advance scout and strategic partner as you explore this spring’s exciting Rehoboth Beach real estate market. I hope you’ll give me a call! Call/Text me Russell Stucki at (302) 228-7871, email me at firstname.lastname@example.org, visit more listings at www.beachrealestate.com
Delaware first-time home buyers in 2014 are faced with a question that hasn’t changed for generations: is it more practical to buy right now, or to continue to rent?
Over the past few years, buying has been the easy choice. Nationally, in 2013 it cost 35% less to own a home than to rent according to that year’s study by real estate website Trulia. That despite rising house prices and mortgage rates. But that was last year, and the experts have been pretty unanimous in predicting that interest rates will continue to rise—ending up somewhere near 5.5% by 2014’s end (per the National Association of REALTORS®).
In the face of higher interest rates and house price tags, will 2014 be the year when renting becomes more affordable than buying?
While first-time home buyers in Delaware are faced with increasing house prices and mortgage rates, renters also find another national trend: higher rents. Rents have been on the rise for the past few years, with continued increases expected throughout 2014. According to Axiometrics, the folks with the latest data, apartment rents are on course to rise by 3.04% in 2014. Research firm Reis puts the expected rise at 3.15%— and both say the causes are the potent combination of tight supply and rising demand. Whenever the economy improves, each incremental gain puts even more pressure on rents—which acts as an offset to any financial benefits of renting versus owning.
Where does that leave our typical Delaware first-time home buyers? Most recently, national averages show it is still about 21% cheaper to own rather than rent. According to the Trulia study, by fall of last year, the earliest tipping point at which it would have become more expensive to own rather than rent would have been expected to occur if interest rates hit 5.2%—but only in San Jose, California—and only if rents had remained fixed (which didn’t happen, even in San Jose). Nationally, out here in the real world, Tulia admitted “mortgage rates will not tip the housing market in favor of renting over buying until rates hit 10.5%...”
Delaware first-time home buyers can be a bit more confident as they take in one more piece of information from the real world of April 2014 (no matter what the experts predicted): over the past few weeks, national mortgage interest rates have been edging down instead of rising! That may well change direction again (probably will), but for now at least, I have to say that it’s a pretty clear call in the spring of 2014: time to get pre-qualified!
That’s the first-time home buyers’ Step One…it also happens to be an ideal time to give me a call!