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Janis Peterson, GRI, Realtor®

Philadelphia Main Line Homes and Real Estate

Tel:  (610) 642-3744

Fax: (610) 658-0267

E-mail: jp4re@pahomes.com

www.pahomes.com
Subject: Arm Yourself for the Bidding Wars
News from the home-buying front tells of a host of shoppers converging on just-listed homes, engaging in bidding wars that rival a Sotheby's auction. It's enough to intimidate even the most experienced homebuyer.

In some parts of the country homes are selling within a few days and, on various occasions, at or above the asking price. Since the onset of this sellers' market, shoppers have been engaging in bidding wars only to hear that their dream house was sold out from under them. Beyond-belief prices, limited choices, and white knuckle decision making leave these veteran shoppers discouraged. Incredibly, homebuyers may fight the good fight three or four times before going to contract.

What can you do to up your odds of getting to the table? Purchasing a home in a sellers' market calls for a blend of traditional and unconventional strategies:

Work with a real estate professional. Don't think you can go it alone in this intense market. Following the expert advice and guidance of a professional may get you the house you want. For instance, your real estate professional should be able to explain the implications of the list price to sales price ratio and the length of time the property has been marketed.

Sell first. If you need to sell your home to buy another, consider selling first. Many sellers have plenty of buyers from whom to choose and may not consider a home sale contingency. If you set your closing date a few months out, you should have time to find a new home after yours has sold.

Be prepared to buy on the spot. The pressure will be on to make an offer on your very first visit. But, even if you do, it doesn't guarantee that the owner won't consider other offers. To increase your chances of getting the nod, and outbidding other buyers, house hunt with pre-approved financing. Some homebuyers don't bother to go beyond getting pre-qualified. But pre-qualified is only the lender's opinion whereas pre-approved is a commitment by the lender subject to an appraisal of the home. Owners may prefer dealing with pre-approved buyers to dealing with those who come in with higher bids but run the risk of not qualifying for a mortgage.

If the home is priced well and the seller has multiple offers, a buyer may resort to making an offer over list price. In a fast market, it could be the deciding factor.

Be flexible. By letting the owner choose the closing and move-out dates, you'll rate high on the easy-to-work-with index. The fewer contingencies you have, the more inclined the owner might be to sell you the house. Remember, when competition is tough, an owner can easily pass you by for someone less demanding. You may consider including substantial earnest money with your offer as a sign of strength.

Make a personal inspection. Although this list is not complete, you'll want to include the following in a personal inspection of the entire property prior to making an offer: Check the foundation for cracks. Does the house show any obvious water damage? Examine ceilings, window areas, and basement walls. Look for damaged plaster and wallpaper. Do you detect mold or dampness anywhere? In the attic, dark water stains and holes with light escaping may be evidence of deteriorating flashing, the leading cause of leaks. Check the major systems-electrical, plumbing and heating. Do you notice anything unusual? Is the heating/AC satisfactory? Look at the appliances. Consider their age and condition. In general, does the house seem well built and energy efficient? Using binoculars, inspect the roof. Depending on the type of material (asphalt, wood, etc.), look for missing, cracked, curled or discolored shingles or tiles, an uneven roof line and holes. Does the house need to be painted, inside or outside? Does water drain away from it? Are any trees threatening its foundation or roof? Is the exterior in good condition? Look for broken shutters, torn screens, crumbling steps, etc. Include an inspection of additional structures such as a garage or shed.

These strategies may help you make a quick but good decision and increase your chances of going to contract. You don't need to be another casualty of the bidding wars.

"Real Service in Real Estate." For a personal consultation on buying or selling real estate, Janis Peterson, GRI, Realtor® can be reached at (610) 642-3744, e-mail: jp4re@pahomes.com. Prudential Fox & Roach Realtors® is an independently owned and operated member of The Prudential Real Estate Affiliates, Inc.

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