Buying a home this spring
Yes, it keeps snowing, but the spring real estate market has truly begun—and it’s brimming with competition. After a bit of downtime, we have transitioned to the consistent stream of real estate activity that is April through June in the real estate world.
Currently there are 68 properties on the market in Cambridge, as compared to 44 this time last year. The average list price is $1,631,143; last year it was $1,521,559. In Somerville, there are currently 72 properties on the market, as compared to 44 this time last year. The average list price is $1,042,051, while last year it was $1,088,690.
So inventory is up, but buyers will probably still hear something like the following from their real estate agents: “Well, there are only four houses that match your criteria in this price range. Would you be willing to extend the area of your search?” or “How quickly are you prepared to make an offer on a property that just came on the market?”
If you’re a buyer in a competitive market such as Metro Boston, here are a few ways you can make a successful offer:
Be prepared with a solid pre-approval from a respected lender.
Put your best foot forward, yet plan for the possibility of getting into a “best and final” second round of bidding.
Stay positive and communicate clearly with your agents. This isn’t the last property you’ll fall in love with.
Be prepared with your pre-approval
If there’s one thing we never get tired of saying, it’s “get pre-approved now!” In fact, here’s what we said in a recent blog about pre-approvals:
First, find a lender. Not sure who to ask for your pre-approval? Check out our list of recommended lenders & brokers. There’s no commitment to stay with this lender for the actual mortgage process; you simply need to confirm that you are able to borrow a certain amount of money. The application itself can be done in person or over the phone and takes about 5–10 minutes.
What you’ll need:
Name and address
SS#—You’ll often need to authorize a credit check
Proof of income/employment (pay stub or tax return)
Tax docs—usually only if self-employed
Bank statements—most recent if possible
This process can be completed in a day or two, and then you’re ready to start looking at homes to buy.
Put your Best Foot Forward
In a competitive market, you may have to move extremely quickly to win the home of your dreams. Could you realistically see a house tomorrow, make an offer immediately, and close within 6 weeks?
Additionally, a competitive market means that you may lose out on a great home time after time, even with a seemingly phenomenal offer. There may be a dozen or more offers on a home, and with that many offers, yours simply might not rise to the top. Make sure that you’re not looking at properties at the top of your price range. We recommend giving yourself 5%–10% wiggle room. Look at places which are priced low enough for you to bid up. The sellers might not entertain a second round of offers, so you may not want to hold back. Perhaps there’s one offer that is already strong enough to accept. In this market, many people waive all contingencies. Are you able to do a pre-inspection? Or waive the value of the appraisal? In brief, try to make your offer as clean as possible.
Stay positive and communicate clearly with your agents
The home-buying process may evolve over time for you. You might start the hunt thinking any property without a driveway is a no-go; but after seeing the (limited) inventory, you may decide that street parking isn’t the worst. Or you may receive a financial windfall you could put towards a larger down payment. These changes can alter the house hunt for you, perhaps drastically. We, as your agents, are here to listen. It’s our job to represent your best interests, and we will use every scrap of leverage to help you purchase the home you want. Keep your agents in the loop, and it will surely pay off.