“Water, water, everywhere, nor any drop to drink.” — Samuel Taylor Coleridge, The Rime of the Ancient Mariner
This article isn’t about being marooned on a raft, out of sight of land, in a typhoon. But that’s what today’s real estate market feels like to many would-be homebuyers.
You probably know why the housing market is so difficult for buyers: There’s a shortage of homes. In case you don’t know why, I’ll explain it: The housing crash and Great Recession of 2007-2008 brought homebuilding to a near-halt, but population kept growing, so coming out of the recession we had more people than homes to put them in, and builders haven’t caught up yet.
Many years ago a real estate broker friend told me the housing market is never in balance. There may be more sellers than buyers, or vice versa; or mortgage loans may be expensive, or hard to come by. Something’s always out of whack, he said. And this is how brokers and agents earn their commissions: They work the problem, whether it’s finding a buyer, a listing, or a loan. His work, he said, is never easy. (What work is? If it was easy or fun, they wouldn’t have to pay someone to do it. — Ed.)
Today, there’s plenty of mortgage money, and mortgages are cheap. Just very few houses for sale, and hungry hordes of buyers.
Housing prices used to be tied to the local job market. People won’t pay more for a house than they can afford, and local wages established what that was. Until remote work came along. Now, you may be competing with a buyer making a Silicon Valley salary no matter where you are, which complicates things.
One solution is to look where other people don’t (see photo), but that has drawbacks (story here). There isn’t a perfect answer.
So, what you need is technique. The following suggestions are drawn from an article here.
Don’t offer less than listing price.
When buyers get multiple offers, they won’t even look at those below asking price.
Sellers want certainty.
Sellers hate deals that fall through. The most attractive offer is all-cash. Next best is a pre-approved mortgage loan. Least attractive is a contingent offer, e.g., the buyer has to sell another property in order to buy the seller’s property. And while the article doesn’t mention this, don’t equivocate; act decisively. Hesitancy will get your offer rejected.
Make your offer stand out.
Sellers are emotionally invested in their homes, so don’t say anything negative. Butter them up (but don’t sound phony). Don’t discuss the house’s pros and cons inside; in this age of remote devices, the walls have ears. Offer to cover any appraisal gap (see article linked above), and waive or minimize contingencies (ditto). Choose an agent who’s good at presenting offers, selling the seller on the buyer, and choose a mortgage broker who’s responsive and will help close the sale expeditiously.
If absolutely nothing else works, chuck your job, buy a sailboat, and become a boat bum. Lots of people have, and few have looked back. Working isn’t all that great anyway. To keep the Coast Guard off your back, make sure you’re outside the 12-mile limit before you flush the head; and to keep from sinking while asleep, close the seacock when you’re done.