In the Boston Condo Market, Speed is Just the Ticket
David Bates / June 27, 2013-10:47 am
If you are looking for a home in this low-inventory market, it’s best to be like Tom Cruise in Top Gun: “feel the need, the need for speed.” Speed is an extremely effective, yet often overlooked competitive advantage for both buyers and their offers. It is a characteristic that can help avoid bidding wars or, in multiple-offer situations, propel an offer to the winner’s table.
The focus on speed often starts by being the first to get to view and make an offer on a newly listed property. While many homes are not reviewing offers until after the first open house, many others are going under agreement in the first 24 hours. As a newly listed home gets distributed to thousands of property email lists and websites from A to Zillow, requests for showings may fill the listings agent’s voicemail to capacity. Wouldn’t it be nice to be under agreement by then? Be the first to see it and you just might be.
If you are among the first to see it, ask the listing agent, “When is the seller reviewing offers?” It’s not uncommon for he or she to reply, “As they come in.” If that’s the case, guess what? Opportunity for you just knocked on this house’s door. If the owner is local, it’s reasonable to make the timeline to respond to your offer very short. If the seller lives on the other side of the world, you might—unfortunately–have to hold the offer out for a few extra hours, but it still may be possible to wrap up this offer situation by morn.
When writing up your offer, whether yours is first or not, you should also consider the seller’s need for speed, too. If the home is vacant, every day that it remains vacant costs the seller money. The seller has to pay the pro-rata on the mortgage, the property taxes, and, as the case may be, the condo fee. Extra days to closing also mean extra heat and electric charges. So, if you see a vacant property, consider a speedy closing. It just might be the difference between a competitive and a winning bid.
In real estate, time is not only money, it’s also risk. Every day a seller owns a home or waits for a buyer to get a commitment letter, is a day that something could happen in the market, on the block, with the property, that changes the home’s value or appeal. For example, the roof could spring a leak, interest rates could go up, or a competitive property could come on for less. I’m not asking you to buy in adverse circumstances, but just to recognize that faster timelines clearly reduce the amount of the seller’s risk. So, obviously, the faster your offer’s timeline is, the more your offer would be considered.
Here’s a couple of ways you can speed up your timelines. As you write up the offer:
· Call an inspector and ask about their earliest availability.
· Talk to your real estate attorney about speeding up the purchase and sale agreement.
· Talk to your lender about what can be done to provide a lightning-quick commitment for the home.
Speed is the not-so-secret ingredient of many successful modern companies. You can be a maverick and realize success in the home-buying process by concentrating on speed too!