We have been experiencing constricted inventory for nearly three years here in the Research Triangle area and buyers are becoming increasingly anxious as mortgage rate increases are on their minds. Doing everything they can to win multiple offer situations from making sight unseen offers, waiving appraisal contingencies, making their offer "As-Is", and granting seller possessions after closing for free. Simply being truly "Pre-Approved" or offering cash is standard practice and expected. However none of these accomplish much if you are outbid. The best strategic advice for buyers in looking in the Chapel Hill, Durham and Raleigh NC area, is to shop below budget. Here are the reasons why.

Bidding Up

It can be very deflating news to read that you will need to bid up from what you were approved for, but if you are really looking to buy right now, that is absolutely what you're going to encounter. Bidding wars on properly priced properties have been norm for the past few years, and we don't anticipate that changing this year. Currently we continue to see offers coming in 5-10% above list price on the vast majority of listings.

Bidding Battles

According to a recent survey by Realtor.com in North Carolina the average home got 5 bids prior to purchase. As a buyer you need to prepared to beat out other people for the property your interested in. This means offering above list price, combined with significant due diligence fees (Non refundable mondy paid directly to the Seller once your offer is accepted), plus notification that you're offer is "As-Is", you're willingness to cover any appraisal shortfall if your getting a mortgage etc. Without these concessions, your ability to secure the property you're interested in is unlikely to grab the seller's eye. By strategizing and looking under budget, you avoid risking falling in love with a property, only to see it go to someone else, or later realizing you've stretched yourself thin; spending what you did

Housing Market Factors and Why You SHOULD Keep Looking

The median existing-home price in December 2021 climbed nearly 16% reaching $358,000, according to the National Association of REALTORS®. Mortgage rates are also rising with the 30-year fixed-rate mortgage averaging 3.55% last week, up from 2.73% a year ago, according to Freddie Mac. Housing prices here in the Research Triangle are predicted to continue rising as are rents. If you are renting and considering buying, be prepared to notice a dramatic shift in housing prices. For the majority of our clients who know they will be here living in the area for at least another three years it is generally more affordable to buy a home than rent.

Can you Afford to Look at the Top of your Budget?

While it might be very tempting to look at the top of your budget, you may find that the costs beyond the list price are further beyond your budget than you would like. According to a 2021 Bankrate poll, sixty-four percent of millennials between 25 and 40 say they have at least one regret about purchasing their current home. This poll ascribed maintenance and high mortgage payments to be in the regrets and an additional thirteen percent feel they overpaid for their home. Buyers need to factor bidding, maintenance, utilities, and insurance on top of the list price when considering their actual budget.

In a buying frenzy and rush to secure a home, in a constricted market, as we have in The Triangle, is it critically important to have a Realtor and a financial advisor on board to help you see clearly and make smart decisions. My NC Homes has decades of experience helping buyers find the right home, at the right price.

Contact us anytime to learn more about the local home buying process.



Posted by Larry Tollen on

Tags

Email Send a link to post via Email

Leave A Comment

e.g. yourwebsitename.com
Please note that your email address is kept private upon posting.