Buyer clients: Raise your hand if you recently found a great Cape house
at a great price, but when you called me for a showing, it was already
GONE? When that first happened, I just thought it was a fluke, but then
another buyer got shut out, and another. Real estate activity on Cape
Cod has increased significantly since the first of the year, and there
are no signs of slowing. You’re not the only shark in the pond anymore.
If you want a great house at a great price on Cape Cod this spring, you
need to adjust your expectations and your strategy.
Slack Tide=Best Time to Feed
You remember the basic Supply and Demand formula: Price=Demand/Supply. In recent years, the Cape Cod real estate industry has been bogged down with excess inventory. This Increased Supply drove Prices down. Call this Low Tide. It’s taken a while, but recently consumer confidence has increased enough so that bu
yers
are now confidently engaging in the market. This is an increase in
Demand, which in a matter of time is going to lead to increased Prices
and a rising Tide. But at the moment, Prices are still lagging behind,
so the ‘Tide’ is neither high nor low, but in flux. The bait is easily
accessible (houses are priced low) and conditions are right (high
consumer confidence), which is what has set off the current feeding
frenzy. As a buyer, how do you compete with other buyers to get the best
house at the best price?
Buy Like a Bluefish
Have you ever seen a school of bluefish feeding? It’s a massacre. The competition is fierce, and the plumpest, freshest bait goes to the boldest, fittest blues. The others just fight over the shredded carcasses that remain. You don’t want to fight over carcasses, do you?
For buyers of short sales, foreclosures, and the like, there are a few extra steps to take to manage the risk that is inherent to these discounted properties:
Slack Tide=Best Time to Feed
You remember the basic Supply and Demand formula: Price=Demand/Supply. In recent years, the Cape Cod real estate industry has been bogged down with excess inventory. This Increased Supply drove Prices down. Call this Low Tide. It’s taken a while, but recently consumer confidence has increased enough so that bu
yers
are now confidently engaging in the market. This is an increase in
Demand, which in a matter of time is going to lead to increased Prices
and a rising Tide. But at the moment, Prices are still lagging behind,
so the ‘Tide’ is neither high nor low, but in flux. The bait is easily
accessible (houses are priced low) and conditions are right (high
consumer confidence), which is what has set off the current feeding
frenzy. As a buyer, how do you compete with other buyers to get the best
house at the best price?Have you ever seen a school of bluefish feeding? It’s a massacre. The competition is fierce, and the plumpest, freshest bait goes to the boldest, fittest blues. The others just fight over the shredded carcasses that remain. You don’t want to fight over carcasses, do you?
- Be Prepared: This is true in any market, but especially this year: whether you’re buying with cash or a mortgage, you have to know what you can afford and be able to prove it. When house shopping with cash, have on hand a recent statement of liquid assets, or a current pre-approval letter from a mortgage lender if you’re going that route.
- Just Do It: ‘Fortune befriends the bold’—Emily Dickinson. ‘You shoulda put a ring on it.’—Beyonce. If you loathe the idea of seeing another buyer’s car in front of your dream home, don’t hem and haw about it. If it looks like a good value to you, pony up and put it in writing or someone else will.
- Clean up your act: With multiple buyers interested in the same property, sellers are often looking at offers that differ only marginally in price. So they are going for the offer that has the least amount of contingencies on it, which is therefore more likely to close. An offer contract generally favors the buyer anyway, so your actual risk of loss is low. Don’t bog it down with excessive clunky conditions or protracted closing timelines.
For buyers of short sales, foreclosures, and the like, there are a few extra steps to take to manage the risk that is inherent to these discounted properties:
- Have a good real estate attorney at the ready. Especially with the robo-signing scandal, the likelihood of title problems is high, and the sooner you know, the better. You need a skilled and experienced attorney who knows the ropes and might even have some contacts within the banks.
- Be willing to gamble with about $1k. If you want to claim a property, you have to put some money down with your offer, generally $500. You may also want to do an inspection or two or invest in a few hours of your attorney before you put both feet into a deal which may ultimately fall apart. This may happen more than once before you find the one that sticks.
-
Prepare yourself for ominous, one-sided seller addenda. Especially
with a bank-owned property, the bank never wants to hear from you or
this house again, and they make sure of it by means of a stack of
legalese that can scare the pants off the average buyer. Sally forth
with both eyes open and always consult with your attorney.
Brought to you by Katie Clancy, Cape house hawker and captain of this email.
katie@katieclancy.com
508-737-1248
katie@katieclancy.com
508-737-1248
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