Are You Ready to Buy in a White-Hot Market?

Before you get started, there are a few things you should know. Pam Cunningham, of Gambino Realtors, shares.

The residential real estate market is on fire right now, as area Realtors are seeing unusually high demand for homes this year. With an increased interest in buying and a low inventory of houses available, it’s a seller’s market. Such conditions make buying or selling a home a bit more challenging.

“If you’re looking to purchase a home, be aware of the marketplace and have an agent by your side to assist you,” says Pam Cunningham, a Realtor and broker with Gambino Realtors, in Rockford.

There are always certain things homebuyers must anticipate when searching for a home, but there are some quirks to keep in mind this year.

“With the highly competitive market we’re currently finding in real estate, it can be like the Wild West if you’re a buyer trying to get a home,” Cunningham says. “Competition is stiff, and buyers may have to make offers on several properties before they are the “winners.”

Competition is so stiff that Cunningham recently received 29 offers on just one property.

“I’ve never seen anything like it,” she says. “Many of the offers were very similar, but several people were offering additional terms, including significantly more money than the asking price, to try to stand out from the crowd.”

To make your offer more appealing to sellers, try offering a higher price or the most you’re willing to pay, even if it’s past the list price, Cunningham says.

Buyers may also consider offering a larger amount of earnest money, being flexible on dates to accommodate the seller, and offering an escalation clause, where the buyer offers to pay a certain amount over the highest offer, Cunningham says.

Of course, a little conventional wisdom still holds.

“The properties that are in move-in condition and priced right are still getting multiple offers,” adds Cunningham. 

Record-low interest rates are also helping the market to thrive. Cunningham says rates are currently below 3%, but they can change daily.

“The bright spot for buyers today is that interest rates are still incredibly low,” she adds. “Many predict rates will rise soon. Locking in a low rate now could save people thousands over the life of their loans.”

Cunningham suggests six additional things people can do to prepare themselves both mentally and physically as a potential homebuyer:

• Have your finances in order (down payment, closing costs, move-in expenses);
• Get preapproved by a lender before starting your search;
• Be ready for competition from other buyers;
• Be ready to act fast when you find a home you love;
• Know your budget and make a competitive offer;
• Have an experienced agent on your side to negotiate on your behalf.

Local homeowners C.J. and Jeff Gregg used these tips and Cunningham’s expertise to help them purchase their dream home.

“Pam had a good balance of knowing when we needed more information and when to give time and space for consideration,” C.J. says. “She is very knowledgeable about home values, procedures, laws, and taxes and she gave us good input about them. Our search only lasted five days before we found the home we were looking for.”