5 Tips for Buyers in Today’s Seller’s Market

Buying a home in San Antonio today can be a frustrating experience, especially when you do not understand what is going on.  Why are homes selling before I can even schedule with my agent to see them?  Why have I made 5 offers and I still don’t have a home? My lender told me to ask for closing costs, but my agent said that wouldn’t work, who is right?

When you make an offer in this market, you are shooting blind.  You know there are probably going to be multiple offers but you have no idea what the other offers are.  You hear that your offer was not accepted but you have no idea what the terms were of the offer that was accepted.  As both a Buyer’s and Seller’s agent, I am in the position to see what is happening on both sides of the market.  I see what offers Buyers are making on my listings, and I see what offers are getting accepted.

Here are a few tips for Buyers that are based on my experience:

1. Start with the right search tools, all websites are not created equally.  The most accurate information available is the actual database that Realtors use to list and sell properties called the Multiple Listing Service (MLS).  Only licensed Realtors can subscribe to the MLS and by its own Rules the MLS must be updated within 24 hours of a status change of a property (going under contract, coming back on the market, etc).  Sold information (sale date, sale price, seller concessions, etc) is only available to Realtor members of the MLS and is not sold to any third parties.  Listing information (listing price, photos, etc) is made available to third parties because that helps to market the Listings.  Many of the large real estate websites get their information from these third parties, and because of that they have to guess when properties sell.  On top of that, they have to update the listings across the entire US from multiple markets. This results in listings being shown that are already under contract, that have already sold, or that aren’t actually for sale.  Our website, www.ExquisiteSA.com, pulls information directly from the MLS and is updated hourly.  If it does not show up on our website, it is probably not for sale.  You can setup an eAlert, or one of our Agents can set one up for you, that will email you within an hour of a house coming on the market that matches your search criteria.  That is how buyers are seeing homes so quickly, and that is how they have an advantage over other buyers using less accurate and updated information.
2. Be prepared to make a quick decision (the day you tour the home).  It’s not enough anymore to just be pre-approved, you have to be ready to make a decision on a home as soon as you tour it because other buyers will.  Sellers today are getting multiple offers within days, sometimes the same day that a property is listed.  Some will continue to allow showings for a set period of time so that all buyers who want to see the home have a chance to arrange a tour.  Most sellers who have multiple offers will stop showings and negotiate with the first group of buyers.  From the seller’s perspective, the most prepared buyers who submit offers first are the most likely to result in the best sale for the seller.  If you wait a day to tour the home, and then wait a day to make an offer, you will have a very hard time buying a home.  If you can’t reach your real estate agent, or they are too busy to show you properties the same day, consider hiring a different Agent who is more responsive.
3. Don’t ask the Seller to pay your closing costs.  The first offers to be discarded by Sellers today are those asking for closing costs.  While it’s true that Buyer’s routinely got the seller to pay some of their closing costs in the past, it is not true today.  In all but the rarest of situations, asking the Seller to pay some of your closing costs is the kiss of death for your offer.  This is also true of Home Warranties, and optional Title Endorsements, Sellers are often comparing offers that are very close on Price and that is when they look to the other terms of the offer to make their decision.  In fact, I have seen Buyers offering to pay for the Title Policy, Survey and Home Owner’s Association fees which are typically Seller costs.  Some Buyers are reluctant to pay what they see as Sellers costs, but smart Buyers are realizing that the perceived value of paying these “Seller” costs is often a huge advantage over competing offers and the actual out of pocket costs are not that much.
4. Be flexible on Closing dates.  Most Sellers have to buy a new home which means that they will have the same problems that you have when they are Buyers.  To avoid being homeless, or having to move twice, many Sellers are demanding that the Buyer lease their home back to them after Closing.  Most Buyer’s lenders will allow a Seller to lease the home back for up to 60 days.  This gives the Seller time to buy a new home, close, and move directly into their new home.  The more flexible you can be with the closing date the better.  Often the ability to lease back will save the Seller a lot of money, and that can really help your offer stand out.
5. Write the Seller a Letter.  We’re all human, and as much as we like to think that we can make decisions based on dollars and cents, we can be influenced by emotion.  Write a letter to the Seller telling them why their home is perfect for you and your family and what it will mean to you.  I’ve seen this work many times, I’ve even seen a Seller reduced to tears after reading a Buyer’s letter.  Tell them why the yard is perfect for your dogs (especially of they have dogs), or how the extra storage works for your home business, or how you have a newborn and this house is close enough for you to come home from work for lunch.  I have seen sellers take lower offers because they are retired military and the lower offer was a young military family that reminds them of who they once were.  Emotions matter and when the Seller is looking for something to base a decision on because the Prices are very close, your letter can be the difference.