Jun
10

It’s a Seller’s Market – Every Minute Counts!

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With all cash offers becoming the norm, open houses packed to the gills, bidding wars, and some listing prices actually rising, there’s little doubt in New York City that it is a seller’s market.   The rules of engagement have changed.  Serious buyers need be prepared to act quickly.  Know what you want and strike while you can.  All cash offers help a lot since sellers are choosing offers with the least amount of hassle.

Recently, fewer apartment listings – down 27.6% last month over a year ago – and low interest rates have increased competition among buyers and driven up prices.  Add to that, listings going into contract faster, and the pressure is on to decide and act on the apartment of your dreams.

Some tips to help you get the perfect place:

Automate Your Search:   Websites like Streeteasy.com and Zillow.com eliminate some of the work, and will allow you to save searches and receive emails with new listings that meet your requirements.

Don’t Wait for the Open House:  Schedule a showing during the week before the first open house if at all possible.  If you wait until the open house, there is a good chance you may not even get a chance to make an offer.

Forget About Getting a Deal:  If this is THE apartment for you, make your best and final up front.  Let the seller know you are really serious.  Consider making the offer with a 24 hour ending time.

Don’t Delay:  Being the first to make a solid offer can give you an edge.

Be Thorough:  Have your financial statement prepared and ready to go, a short personal biography and anything else your broker recommends to put you in a strong position.

Increase Your Down Payment:  The standard 20% down is very old school.  Most brokers are recommending 30% to 35% down.  Appraisals are lagging behind asking prices because they are based on past sales.  If the appraisal comes in low, the bank will not lend more than the appraised amount, so buyers need to have cash to make up the difference.  A larger down payment can give you the edge in multiple bid situations, as well as make you look stronger to a co-op board.

Beware of Mortgage Contingencies:  Fewer sellers are willing to accept contingencies, and the buyers may be desperate enough to waive the contingency and risk losing their deposit.  But beware; if you don’t have cash to cover your losses, it’s not really a good idea to give in to the pressure.  If the appraisal comes in low, or the bank finds a deficiency with the building and won’t lend you the money, you could lose your deposit without the contingency.

Negotiate the Contingency:  Get your broker to help you structure the contingency so that it is attractive to the seller, but protects your interests.

Set Your Ultimate Price:  Decide what your number is, and be prepared to walk away.  This way, hopefully you’ll be able to sleep at night.

Sign Your Contract Quickly:  Today’s sellers get impatient when buyers take too long with their due diligence and negotiations.  A contract isn’t binding until it is signed.

 

Inspired by New York Times article

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