Denver Real Estate Update - How to Buy a House in Today's Market
Buyers and brokers alike are finding the Denver real estate market very challenging right now. Why? There is a shortage of homes for sale and a surplus of buyers. The buyers are anxious to get out of paying the outrageous rental rates and truly want to own a home of their own.
Home sellers are enjoying being in the driver's seat right now. They are listing with a broker and finding their home appealing to more than one buyer. Often there are multiple buyers creating a bidding war that most buyers prefer to avoid.
The image above is something I just grabbed from our MLS, REColorado. It is a graph of the market activity over the past 7-days in Denver. As you can see the Under Contract column far exceeds the New Listing column. It's no wonder buyers are struggling to find a home!
I Want to Buy a House, what must I do?
Get ready, prepare yourself for competition.
- Be sure you have an experienced agent who knows how to write a "clean contract." (More about this later!)
- Get yourself to a reliable, local lender.
- Be sure your lender prepared to write you a strong "lender letter" as soon as they can. You need to be sure your lender is available to write this letter in the evenings or on a weekend. Real estate sales don't follow 9-5 banker's schedules!
- Confirm your lender is willing to call the listing agent and sing your praises.
- Talk to your Buyer Broker and make sure they will communicate with the listing agent. (I can't tell you how many times I've received an offer and not a phone call or an email from the selling agent!)
- Your buyer's agent should have negotiation skills. By this I'm not talking about price only, there are so many nuances in negotiation that will help you get the house, but not cost you more, your agent should work with you to form a realistic strategy.
- Do a "flexibility analysis" on yourself. Can you offer flexible terms to a seller? If so what are they?
What kind of HOPE can the Denver Real Estate Market offer a buyer?
- One in Five homes that go Under/Contract come back on the market. So continue to watch the ones you lost, they may return.
- Homes are selling, so some buyers are winning. Work with your agent to determine how to create that winning offer!
How to write a "Clean Offer"
Buyer's take a step to the other side of the transaction. Think like a seller. As a seller what sort of offer would you most like to accept?
- Good offers are written well, all the blanks are filled in, the dates make sense.
- Clean offers come from buyers whose broker took the time to connect with the listing agent to see what terms the seller would like. By terms I mean 1) closing date 2) possession date
- Clean offers arrive to the listing agent all together in one email. An offer will include the contract to purchase, lender letter, disclosures (yes you can get them ahead of time to review), lead based paint disclosure is required by law to be signed prior to signing an offer and must be included with the offer, plus any other docs. In the good old days when all we had is one offer to work with, it was ok to not be as organized. But today when there are 14 offers on a property do you think it is realistic to expect the listing agent to cull through all of them to organize them per buyer? They may try, but multiple offers mean a stressful time for the agent and the seller. So insist your broker do what they can to bring convenience to the listing agent & owner's life.
- A clean offer gives the seller enough time to decide. Yes it would be cool to "force" the seller into responding ASAP. The reality is the seller doesn't have to respond to you at all, much less ASAP! As seller most likely find an offer with time to think refreshing. Yes, it would stand out.
All these suggestions might seem silly because anyone with common sense would be performing them properly. So not true!
As a buyer in today's market it is possible to purchase a home. One must be ready, flexible and have the patience and you will find a home.