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HOUSING OUTLOOK 2016 continued
That’s the market Justin Abbott, 44, faced when he listed his suburban Omaha home for sale with NP Dodge Real Estate in September. Divorced and without kids, he was tired of suburban living. But before he listed his home, Abbott found a two- bedroom, one-bath, loft-style condo in
a former warehouse in the Old Market neighborhood of downtown Omaha. That eliminated hustling to nd something to buy after he had a sale contract.
Abbott had bought his ranch-style house—with three bedrooms, two baths and a great view—in the fall of 2011 for $254,000. He listed it for $278,000 and received four offers within the rst week. But this was no bidding war: Three of the offers were full price, but each one asked for concessions. Omahans are “a little too conservative to get frantic,” says Mike Riedmann, president of residential real estate at NP Dodge. Abbott accepted an offer that asked for a modest contribution to closing costs but no contingency
for sale.
The sellers of the condo Abbott bought had their own challenges. Since originally listing the condo for sale in 2012, they had reduced the price six times. When Abbott saw it, the sellers were asking $333,000. He offered $316,000 and a quick close. They accepted immediately.
Nothing sells a house quicker in any market than presenting it in move-in condition, says Riedmann. Most buyers don’t have the desire or time for do- it-yourself projects, and they typically overestimate the cost of work when they ask sellers for price concessions. If your home needs paint or new carpet, get it done before your rst open house. It also pays to price your home right the rst time. Your agent should help you do that based on recent comparable sales. Buyers are too smart to make unrealistic offers on overvalued homes, Riedmann says.
BUYERS SING THE BLUES
Nashville may be known as Music City, but that’s not the only act in town. Its economy has diversi ed, the population is growing, and people are moving there without a job, expecting they will get one. But if
they want to buy a home, they may have to scramble. In September, home prices rose at a 7.3% clip from the year before. In August and September, Nashville had the largest year-over-year increase in sales of the 66 cities followed by the Red n Housing Market Tracker. With just three months’ supply, the market feels “frantic” for buyers, says Alexander Brandau, a local agent with Keller Williams Realty.
Pam Lucas, 37, and her husband, Chris, 38, were living in a suburb of Columbia, S.C., when Pam received a job offer from a veterinary practice in Nashville, their hometown. Chris is able to work anywhere with a computer and an airport, so Pam took the offer. Because the housing market is hot in Nashville but not in Columbia, they decided to buy rst
and sell later.
In September, Pam began doggedly searching online listings. The couple
set their sights on a three-bedroom, two-and-a-half-bath Victorian in East Nashville, a desirable older neighborhood, but they lost that rst choice to other buyers. After seeing a succession of other homes they didn’t fall in love with, they decided to reconsider a home they had previously rejected. When they saw it,
they discovered the pictures hadn’t done
it justice and made an offer. The sellers were asking $589,900. The Lucases bid $550,000 and included a preapproval letter and a contingency for a home inspection. When the sellers countered at $580,000, the Lucases quickly accepted it to beat an offer from another buyer.
There was one glitch: Because the Lucases planned to move before Pam began her new job, they lacked the two paychecks required to qualify for the mortgage they needed. After putting down
20% and taking out a conforming jumbo mortgage of $425,500 with a 30-year xed interest rate of 4.25%, they were more than $30,000 short, which they covered with an unsecured loan with a rate of 5.3%. They haven’t decided what to do with their South Carolina home. They don’t think they can get the price they want for it now, so they may rent it out.
In a fast-paced market with limited supply, get your ducks in a row before you shop. See how much house you can really afford by getting preapproved for
a mortgage from a local lender that sellers’ agents value for reliability and responsiveness; the preapproval letter will assure sellers that you will qualify for the nancing you need to close the deal.
If you see a home you want, make your best offer rst. If you make a lowball offer in a multiple-offer situation, the seller may not give you time to make a higher bid. You could include an escalator clause to increase your offer automatically by a certain amount over a competitor’s, but sellers prefer knowing how high you’re willing to go the rst time around.
Tell your agent what you’re willing to offer other than your offering price. For example, the sellers may want to close quickly or rent the home from you after closing while they look for their next one.
Protect yourself with contingencies
for nancing, an appraisal, a home inspection or the sale of a previous
home. Assure sellers that you’ll use an inspection to identify major issues, not demand a multitude of small repairs. And expect the unexpected. The Lucases’ mover canceled on moving day because of the “1,000 year” rainstorm and ooding in Columbia. The couple rented a truck and moved their stuff themselves.
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