6 Tips for Buying Real Estate in the Hot Coronavirus Market
There were many times I thought that we may need to give up and wait. We made several offers, two in Georgia and one in New York, without any bites. They didn’t even bother replying or counteroffering! And we made solid offers near asking! But, we kept getting beat out by above-asking and cash offers. Finally, after months of looking, we were able to snatch a nicely renovated two unit in our area at a great price!
If you’re in the market and looking to buy something off the MLS, here are six things that worked for us when buying real estate in this hot coronavirus era seller’s market.
Josh and I celebrating our 9th anniversary and closing on this property purchase 🙂
6 Top Tips for Buying Real Estate in the Coronavirus Era
1. Be Aggressive when looking for real estate
Most good properties are being snatched up the day they hit the market. It’s really important to look at new listings every day. If a place looks good, jump on it as quickly as possible and get the offer in.
2. Don’t try to low ball the initial offer during coronavirus
Lowballing is not going to get you anywhere. These days, most decent properties are getting above-asking offers. The three offers we put in before we landed the one we bought were below asking and what I thought the place was actually worth.
I’m sure I don’t have to tell you that that strategy won’t work in this market. Most sellers are anchored to the idea that they will get a high initial offer in this coronavirus market, no matter the condition of the property.
So, we changed strategies and went in with a high offer and negotiated later.
3. Utilize the offer contingencies to negotiate.
With our successful offer, we went in with an above-asking offer. It was clear when we toured the place that some repairs would need to be addressed.
So, we included an inspection contingency (which is pretty standard) and chose to negotiate that after we were already under contract. That way, we could actually have a conversation about needed repairs during due diligence with the seller in a reasonable manner, without competing with other buyers.
4. Splurge on inspections
Speaking of due diligence- this is not the time to be cheap. We splurged on getting several specialized inspections to make sure we found out everything that needed to be fixed. Then, we got several quotes for needed repairs and used that to negotiate the price. That paid off for us big time in the long run.
5. Know your seller
Do your research on the seller through agents and the internet. When buying off the MLS, it is often difficult to ascertain the motivations of the seller. Utilize all avenues, including social media, to get a better understanding of the seller’s motivation and their bottom line. Then, use that information to negotiate. Also, though we didn’t utilize this, a personal letter with the offer would be a nice touch.
6. Be organized
My neurologist uncle likes to call us internists “euboxics.” We are detail oriented and like to check all the boxes… and you know, make sure everything is in the normal range and/or explained.
So, in true internist fashion, I kept a google doc list of all the to-do’s and repair items to address (complete with checkboxes of course). I shared it with the realtor and our attorney, as well, so they know what I was thinking.
Josh also made us a google drive to keep up with all the documents we received from the seller. That helped us all keep track of all the things that needed to be addressed before closing.
I got this very sweet card from my attorney at closing… seriously I had the best team ever. And, it pays to be organized and diligent!
If there’s one thing I’d change about this purchase, I’d probably go back and give a little more to the sellers because I feel like they walked away a little disheartened. I find that real estate purchases, like all things in life, are really about people, relationships, and finding a place where both parties feel like they won. I’ll take this lesson with me going forward.
Until next time!
Stay frugal, ya’ll!
Standard Disclaimer: Not meant as individualized financial or medical advice. Please do your own research or consult a financial professional before making any major money decisions.