Preparing For a Multiple Offer Situation in Austin
Maybe you don’t want to hear it… but here’s the truth:
About 168 people move to Austin every day.
If you were looking to buy a home in the Austin area 5 years ago there were over 5,000 more units for sale than there are today.
Demand is up month over month: median price is up 14% year-over-year in December 2020.
If your offer is $3 million dollars cash, you can forget this article and just call me. 😉 Just kidding!
However, if you’re hoping to buy the cutest, newest home in the middle of the street where your kids can play and attend the best schools, AND your budget is $100,000 below the average sales price in the neighborhood, you’re going to want to read this.
If there’s one thing I learned while selling real estate in San Francisco and now in Austin for the last 7 years, it’s this:
Be prepared to buy your dream house in 5 minutes.
It sounds extreme, I know, and you probably will not have to make a 5-minute decision (maybe a 24 hour decision). But the sooner you wrap your head around this idea and you go through these steps, you set an expectation to bet at the highest bar. In return, buying a home in a competitive market will feel rewarding.
Talk to Your Realtor and Set Expectations
I cannot stress this enough in a competitive market. I know in our digital-centric world Redfin, Zillow and Realtor.com give you a ton of access to what’s on the market right now, and you think getting a realtor before you’re ready to buy is too serious. But what if you casually walk into your dream home on Saturday only to find it’s been swooped up by Sunday morning? Wouldn’t you be disappointed? Your realtor will give you quick facts and important documents so you’re prepared for offer deadlines.
Talk to Your Lender
No seller looking at multiple offers would consider a buyer without a prequalification letter. Since many lenders do not run prequal checks on the weekends, be sure to get this completed asap. Applying with a lender does not hurt your credit, and I encourage all my buyers to apply with at least one lender.
Here are some questions you can ask your lender:
What is my loan maximum, or how much house can I afford?
What type of loan should I get?
How fast can you close a loan for me? How many days do you need for initial loan approval?
What hours do you work in case there is an emergency?
If I have a large downpayment, what is my appraisal minimum for the Appraisal Contingency Addendum?
How long can you lock my rate?
Wishlists
For my type-A buyers who like lists, check out this blog post about creating a wishlist with your buying partner(s) or a friend or family member who knows you well. When you’re making quick decisions, it’s nice to look at a list and quickly realize how many assets a home will provide you.
Cover Letter
A cover letter may or may not help you, but why not give it a try? While some agents or sellers will simply ignore them, others will use your cover letter to gauge your interest in the home. In a seller’s eyes, a buyer who writes a cover letter is more likely to close and less likely to ask for frivolous favors during escrow. In your cover letter…
EDITED: September 22, 2022. Cover Letters or “Buyer Love Letters” are no longer recommended by the Texas Association of Realtors because it creates room for Fair Housing Violations. One less step for you to get ready to buy a home!
Open Houses
Attend as many open houses as you can. If you are specific about a certain neighborhood or facade, you will begin to notice floor plan similarity. As you become more familiar with floor plans, you will be more likely to know when a home is perfect for you from the home’s marketing website (to save you time), and more likely to know when a home is “the one” upon entering (saving you money).
Go Over the Contract with Your Agent
If you are a first time homebuyer (or first time buying in the state), I recommend going over the offer paperwork with your realtor before you get serious about the home search. This allows you to quickly and comfortably make leveraging decisions when writing the offer at 10p on a Saturday night, instead of feeling nervous and rushed through the process.