Ask McEnearney: Do you have suggestions for people trying to buy a home in this hot market?

This week’s Q&A column is sponsored and written by Lisa Groover of McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant Alexandria market news, contact Lisa at 703-919-4426 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: Do you have any suggestions for people who are trying to buy a home in this hot market?

Answer: Your question is one that the majority of buyers are asking during the strong seller’s market we have seen in 2020 and 2021. Buyers are experiencing competition in almost every style and price range and find themselves writing multiple contracts that result in a bidding war with 10+ other offers.

For these reasons, having an initial buyer consultation with your agent is even more important.

Yes, most buyers search online before they reach out to their agent and would prefer to jump in the car and go looking at houses right away. But with the lack of inventory and speed of the market, having an in-depth conversation with all parties involved in the purchase will help iron out a few of the big questions and agree on a process in advance.

As a student of Ninja Selling, I use Larry Kendall’s suggestion of asking each decision-maker to list everything they want in their new home and to put a star next to the top three most important must-have items. The next step is to really explore why the non-negotiables are so important. Do they need four bedrooms for all family members and guests, or do they want at least one dedicated home office space? Could the office be in a den or loft instead of a bedroom? Do they want a large yard to throw the football around, or would living close to a park work? Do they need an open-concept floor plan for entertaining, or would a walk-out lower level with access to the yard work for get-togethers and cookouts? What about taking down an existing wall to open up the main level? Knowing what is most important to each decision-maker from the start will fine-tune the search criteria. According to Larry, people buy because of their “whys,” not their “whats.”

Talk about financing right upfront. Will you be paying cash or securing a loan? Have you already spoken to a lender and have a pre-approval letter? Discuss the price range approved by the lender and your actual comfort level for the purchase. Do you need to sell your current home before you can buy? Talk about earnest money deposits, down payments, sources for gift funds and cash on hand if you decide to include an escalation addendum or if an appraisal comes in lower than your sales price.

How about your timing? Is there a critical date associated with your move? If you are renting, could you go on a month-to-month agreement after your lease expires? Would you consider paying a penalty to your current landlord if you found something sooner than expected? Have you sold your house and need to vacate? What is your game plan if you do not close on a house before your deadline?

What about location? Are you set on a certain neighborhood or ZIP code? Do you need to be close to a Metro or a specific school? Do you have any flexibility if the right property is not on the market in your preferred location or price range?

In addition to price, timing and location, it is also beneficial to go through the various contingencies and terms associated with your offer in advance of actually submitting it. Once again, due to the fast pace of the current market, review options for home and radon inspections, appraisals and financing contingencies, closing dates, home sale contingencies and escalation addendums.

One statistic I always share is that, with advance planning and informative discussions, 60% of buyers find their new home the first day they go looking. And that 50% of the remaining 40% find it the second day. For this reason, being prepared to move quickly is essential.

Another thing to think about is that there is never a “perfect” home. Larry Kendall teaches that if a house is 85% or more of what you want, then you should really consider making an offer.

What if you are not finding a home with 85%+ of your non-negotiable list, in the location that you want and in the price range that you are willing to pay? Or… what if you have written a number of offers and you are not coming out the winner?

I would suggest going back to the beginning:

  • Review your must-have list to see if your criteria has changed or can be modified.
  • Think about a home that may need a little work or remodeling rather than one that is new or updated.
  • Consider a home that has been on the market for a bit of time, instead of one that just came on the market that week.
  • Explore options for increasing your price point (gift funds, borrowing against your retirement, reducing your amount of debt, working on your credit score).
  • Talk to your lender about other loan programs, including construction and bridge loans and putting less down so that you have funds available for updating.
  • If you are being outbid, modify your search criteria to be lower than your maximum point so that you have room to escalate.
  • Review your contingencies to see if there are any that you would consider waiving.
  • Check out a neighborhood or area of your region that is a bit farther from where you started your search.
  • If you always wanted a center hall colonial, think about a split level or ranch.
  • Ask your agent to write a letter to homeowners in your desired neighborhood. Make it personal rather than a form letter that can be perceived as a solicitation.
  • How about renting for a year until the inventory picks up and the competition is not as fierce?

I would like to share a few comments from some of my buyer clients:

“Lisa listened to what we were looking for in a home, was responsive to all of our questions and moved quickly once we decided to make an offer. In an area where desirable properties sell rapidly, we appreciated her expertise and guidance throughout the process. She helped us craft an offer that would give us the best chance of acceptance.” — Brigid & Jim C.

“When we decided to focus on finding a home in Alexandria, we spent a year getting to know the neighborhoods and market. In a highly competitive environment, which included more than a couple of starts and stops, Lisa’s insight in addition to her knowledgeable and helpful network, made all the difference. We found a perfect home in a perfect neighborhood. Thanks, Lisa!” — Ginger & John L.

“My husband and I had our hearts set on living in Old Town, but Lisa Groover helped us see the community ideal for our lifestyle was actually Cameron Station. It’s a perfect fit for our preferences and pocketbook, and we are very happy in our Cameron Station condo.” — Jasmine S.

Interested in receiving McEnearney’s new buyer’s guide? Visit my website to request a digital copy, or I’m happy to drop it off or mail it to you. Whether you are thinking of moving in six weeks, six months or six years, I am happy to get together to discuss your short- or long-term plans and questions.

Lisa Groover is a licensed real estate agent with McEnearney Associates, Inc. in Old Town Alexandria, VA. As an active member of the community since 1989, Lisa specializes in Alexandria, and is thrilled to have the opportunity to work closely with her friends, neighbors, former clients, and their referrals.

In addition to enjoying the Old Town lifestyle and the art related events and activities, she is a member of a number of volunteer organizations. Having had eight Golden Retrievers, she is dedicated to helping other dog owners through the challenges of renting, buying and selling their home.

If you would like a question answered in our weekly column or to set up an appointment with one of our Associates, please email: [email protected] or call 703-549-9292.

McEnearney Associates Realtors®, 109 S. Pitt Street, Alexandria, VA 22314. www.McEnearney.com Equal Housing Opportunity. #WeAreAlexandria