In my last diary entry I shared my experience with getting finances in order to get approved for a loan to purchase a home. With that out of the way we moved on to searching for actual properties to make offers on. I called the real estate I had selected based on the research and referrals. I gave her our parameters, including: the exact neighborhoods we were limiting our search to, size, price, etc. We initially intended to buy a full renovated townhome that was “turn-key.” We wanted to be able to move in right away and not worry about a renovation budget.
We had an FHA loan and weren’t putting down the standard 20%, so my agent warned us that we would make multiple offers before a buyer would finally choose us. As is the case in many markets across the country right now, our market is definitely a “seller’s market.” There are more buyers than properties, so sellers are receiving multiple offers and, in many cases, homes sell for well over their list prices because of bidding wars. Likewise, many first time buyers with limited budgets go up against investors who can offer cash for a home instead of financing it.
My agent also warned us that we needed to make ourselves available to view listings as soon as we found one we were interested in because many get offers almost immediately. I hit realtor.com hard needless to say. Every couple of hours I would troll the site in our desired zip code to see if any new listings had appeared. The site refreshes its listings every 15 minutes, so I knew I would be among the first to see a property when it was entered into the MLS (Multiple Listing Service), or I’d be able to see if the status of the property had changed. The minute I’d see a property, I’d call my agent and let her know when we wanted to see it.
We ended up viewing five listings total and immediately ruled out townhomes. We realized that for the price they were and with homeowner’s association fees included into the price, we’d end up paying almost as much in our mortgage each month as we would if we purchased a single family home. Plus, many of the townhome communities did not accept FHA loans. Ruling out this property type meant that we had to bump our budget up and consider listings that needed more work.
It would be so frustrating to walk in the door at a showing and hear the listing agent say, “We already have five offers,” even though the house had only been on the market for a day. Likewise, the first three listings just weren’t for us. I would have made an offer on all of the homes we viewed, but luckily my boyfriend is a contractor’s son with a good eye for construction quality and discerning taste. Mike had to bring me back to reality on more than one occasion.
The day our listing hit realtor.com, I saw it within the first hour; there was something about it needless to say. It was far from the prettiest home I’d seen, but the floor plan looked great and I couldn’t help but notice how well-maintained it was. I hesitantly e-mailed it to Mike and was shocked to quickly get a response about how great it was. He wanted to see it immediately. We called our agent to meet us there that night. We spent over 30 minutes walking through the house when we’d spent less than 10 at every other listing. We mostly ridiculed the 1970’s décor, the excessive wood paneling, the carpeted garage … it was certainly a diamond in the rough. It did have a newer roof though, brand new windows and was definitely cared for. We went home dazed and decided that night to make our first offer.
In my next post I’ll tell you all about the offering process, as it was truly unique, and how we learned firsthand about coming out strong with your best offer immediately.