How to Win in the Insane Raleigh Real Estate Market in 2022
Buying a home in today's market can be frustrating. Here are some ideas about how to make that process go a little bit better for you. There are many frustrated buyers and would-be buyers in this market right now, trying to buy a home. Here are some of the tips that we share with our clients to make the process smoother.
The first tip, go rural. It is a good solution since the homes that are further from Raleigh are not as expensive as the homes in Raleigh. They're not even as expensive as the homes in the suburbs like Apex, Holly Springs, Cary, and Fuquay-Varina. By going out further to Smithfield, Sanford, Burlington, Elon, Henderson, and Oxford, your money will go further. Is it worth spending a year while you save up money while in a nice, expensive apartment and lose equity along the way? Versus buying something in one of the rural areas where you can start to build equity by saving the money that you were to spend on the fancy apartment. The good news is with so many people being able to work from home, the opportunity to move into a rural area has opened up and become possible.
The other advantage of moving out to a rural area is they tend to not be as competitive. To avoid the frustration of losing out on offers on Raleigh area houses, looking further from Raleigh, you will have less competition. You are less likely to experience the stress of losing out on 5, 10, 20 offers like many other people are experiencing in the Raleigh area.
The next tip, work with a local Raleigh area lender. We tell this to our clients all the time as they are moving into the area. You can use a lender in your hometown but you are losing one dramatic advantage. The local real estate agents that list homes are looking for any differentiation between all the offers that they receive. If you have an out-of-state lender, especially one on the internet, it's likely your offer won't be accepted. The listing agent that listed that home for sale can easily call the local Raleigh mortgage lender. They can ask them, “ tell me about this buyer client? Are they solid and ready to go? Can they close on time? Or do you have concerns about them?” They can feel out that mortgage person as well.
If there is a delay, the listing agent and your buyer's agent can also call the local Raleigh mortgage person. They can physically go into their office and have face-to-face contact. It is a huge advantage over the out-of-state mortgage lenders and something we recommend. It's something you can do to strengthen your offer a little bit more. It gives another layer of comfort to those sellers.
And by the way, we have three local lenders in the Raleigh area that we use all the time. If you are in need of some mortgage advice or, or someone to get you approved, please let us know. We are happy to share that list with you. They're fantastic people. They would love to work with you. They would love to answer any questions you have.
The next tip, buy an ugly house. Consider buying a fixer-upper, if you are having trouble buying houses that look like models. Consider a house that is dated and has some issues with it that need to be repaired. These are the houses that right now in this market, people are passing over. They are sitting on the market for a while. They are not going to command top dollar. They're also not going to get a lot of competitive and multiple offers. Consider finding a fixer-upper that you can then hire a general contractor to help you fix it up. You can then customize your perfect house and not have to pay a fortune to get it.
It’s also a win-win for the seller, they get to sell their house, and a win-win for you. You're not having to compete with a ton of offers and overpay. Once you find a house that will work for you, make improvements and fix it up. Wait for the market to cool or flatten out a little bit with the price appreciation that is happening. Put it back on the market and sell it and have that positive equity that you have built.
The next tip, be aggressive upfront. We have had so many clients work with us who start looking and exploring and find their dream house very early. Instead of being aggressive and making an offer on their perfect house, they don't. These clients decide they are going to wait. These clients don't believe us when we tell them you have to pay X dollars over the asking price to get this house. Do yourself a huge favor, take your real estate agent's advice. Real estate agents who have been selling in the Raleigh area for many years, know the North Carolina real estate market. When they recommend you make an offer of a certain amount, that is a good place to start.
Remember this rule of thumb, pay the amount that you are most willing to pay for the perfect house. If someone makes an offer stronger than your offer, you can walk away. You believe they have thrown money away. As long as you can say, I don't believe I would want to have paid what they paid. If you can say that to yourself, you have done all you can do.
That being said, don't wait for your agent to call you back and say, unfortunately, they took a higher offer. And then you say, I knew we should have paid X amount more. Well, it's too late to X amount more, after all the offers have to be in and they are evaluating the offers. Be aggressive. When you find the house you like, make sure you jump on it with the most money and the best terms you can.
And the next tip along those same lines as the last tip, don't sleep on it. There are so many clients who get started in this process, who go through the early phase of exploring, and it is easy. They are happy. They are looking at homes, they may find the perfect home for them. They have filled out our buyer needs questionnaire and the ten items on their list that they must have in a house. We have found them a house that fits eight, nine, or ten of those must-have items. Instead of sleeping on it, know it is very likely that that house will get sold within a couple of hours. You may not have time to think about it overnight or even two days later. It may very well get sold. So be aggressive, back to that last tip. If you find the house for you, don't expect that a better house is gonna come along. You have to not plan on sleeping on it.
The next tip, learn from the mistakes of others. Understand when your real estate agent gives you horror stories, they are not only for your amusement, they are also for your benefit. Don't wait to buy a house. Don't buy any house that comes along. You need to stick to your guns and buy the house you want. We ask all of our clients to fill out that lengthy buyer needs questionnaire. The reason is we use that document to help you zero in on what you want in a house and help you find it. You have to stick to the list of the things you want. For example, if you must have a master primary bedroom on the first floor, we are not going to show you houses with master primary bedrooms on the third floor. You may buy it and you may be happy with it for a few months. Then you'll become unhappy with the house and then unhappy with us. We don't want that to happen. It's better for you to wait to find the ideal house than to settle for the mediocre house.
The next tip, buy under your budget. If you have a budget of $ 500,000, it's a good idea to look in the $ 425,000 to $445,000 range. You will be able to find a house that's going to suit your needs. Keep yourself from having to pay $550,000 for a $500,000 house. You will structure your mortgage to be a little less money. This should free up more of your budget to make those improvements on that $425,000 house. To turn it into something that resembles a $500,000 house. Think about going down in your budget so that you can go up to get the house of your dreams.