As a buyer, what do you need to do to purchase a house in today’s hot market? Life as a buyer can be challenging, especially if you’ve seen what houses have sold for over the last three months. When I discuss home prices with clients, I’m mainly concerned with two types of values: appraised values and market values.
In today’s environment, a home’s market value is going to be much higher than its appraised value. That means there’s a chance that the property may not appraise for the price that you offer on the home. If you’re a buyer using a mortgage and the appraisal comes in for $100,000 less than what you offered for the home, you’ll have to make up the difference somehow. There are three ways to approach this scenario:
1. You can get the seller to reduce their price.
2. You, the buyer, can make up the difference. This option is usually what happens in our market.
3. The seller can relist the home. The second option is usually what happens in our market.
Something else that buyers need to consider is that you can’t have a mortgage contingency in your contract if you want to win. Houses usually won’t appraise, so if your offer is contingent on the appraisal, you probably won’t be able to purchase the home. That’s why, as a listing agent, I ask buyers for proof of funds that shows they have the cash to cover the gap if the home doesn’t appraise.
The final thing to keep in mind as a buyer is that you need to work with an experienced agent who knows how to write offers and negotiate with other agents. I’m focused on the market 24/7, so I can help you navigate the complexities of today’s environment and help you successfully complete your purchase.
If you have any questions or need assistance buying a home in our market, don’t hesitate to call or email.. I’d love to help you.