I spent 3 weeks talking to realtors across the country about how to navigate the chaotic real estate market. Here are my 4 biggest takeaways about homebuying.

Male realtor shows house for sale to young couple
Real estate sales have been booming during the pandemic as many Americans migrated out of big cities or upgraded to larger homes.

  • I spent weeks talking with realtors from across the country about the chaotic market.
  • They shared their best tips on what to know in advance and how to win a bidding war.
  • I found four major takeaways, including that buying too quickly could lead to regret.
  • See more stories on Insider’s business page.

Last year, during the initial weeks of the pandemic lockdowns, it was comforting to indulge in a fantasy: a home with extra space and maybe even it’s own backyard.

This life, which previously felt unavailable to many city-dwelling millennials like me, suddenly seemed within reach. The pandemic made working from anywhere the norm, not the exception. And those of us who were lucky to have kept our jobs during a period of economic uncertainty for many Americans were able to save money for maybe the first time in our adult lives, aided by stimulus checks and, frankly, nothing to spend money on.

All of a sudden, this fantasy seemed more like a possibility, and many millennials decided to take the leap. Combined with existing homeowners looking to upgrade or expand, or simply take advantage of low interest rates, the US real estate market has become a wild land-grab, with buyers hoping to snap up homes amid soaring prices.

Read more: Should I buy a home right now? Here are the 5 things you should know before diving into the bonkers housing market.

To learn more about the market – and perhaps, selfishly, to understand the situation in case I wanted to explore the process myself – I turned to eight realtors who work in markets across the country to answer questions like what prospective buyers should know going into the process, how to win a bidding war, and what other buyers are looking for in a home right now.

Here are my biggest takeaways after spending three weeks learning from realtors nationwide:

Try not to fall in love with every house you see.

Given the competitive state of the market, the homebuying process can take a toll, emotionally speaking.

Glen Clemmons, a broker and realtor for Costello Real Estate and Investments in North Carolina, said that in some situations, both he and his clients have ended up feeling “beat up.”

“I had one client who wrote 15 offers before they finally got one, and that’s exhausting,” he said.

Clemmons said his clients are going to multiple showings, putting in several offers, and generally being put through “the emotional roller coaster of, ‘Are we going to get this one?'”

“What I would say is, check your heart when you walk through a house,” he added. “[Going to a showing is] not a guarantee that you’re going to get it. Put your best foot forward, and be patient.”

Know that you can always fix ugly.

Mary Pope-Handy, an agent with Northern California firm Sereno and a blogger who writes about Silicon Valley real estate, told Insider that she sees lots of first-time homebuyers who keep getting boxed out of competitive bidding wars. While many of her clients are looking for a move-in ready home, that’s not always an option.

She advises those buyers to look for a house that’s been on the market for a while, because it’s less likely to be competitive. But that advice does come with a caveat: The kinds of homes that have been for sale for a month or more, especially given the current state of the market, usually have something wrong with them. It could be that it’s priced too high, or that it’s just plain ugly.

“You can fix ugly,” she said. “I would always go with the ugly house, with walls in the right places, in a good location, and then fix ugly over time.”

Don’t ignore the condo market.

For some buyers, condos aren’t as attractive of an option as a standalone house, especially during the pandemic, said Sean Waeiss, a broker and the owner of Wise Property Group in Austin.

Condos aren’t always what people envision as their first home since they’re grouped together and don’t always have their own outdoor space. From an investment standpoint, too, a condo probably isn’t going to gain value like a single-family home. “It’s the canary in the coal mine. With recessionary periods and that sort of thing, it’s the first to get hurt and it’s the last to recover,” he said.

But a condo could also be the perfect option for a younger homebuyer, especially one who keeps getting outbid on single-family homes, Waeiss said. Demand, at least in Austin, is significantly lower than supply, and condos are typically situated in urban centers where it’s possible to walk to shops, bars, restaurants, and even the office – a key amenity now that cities across the US are reopening.

“I think Americans, by nature, have short-term memories,” he said. “When the majority of the country is vaccinated and events are happening, concerts are happening on a regular basis, and restaurants are operating at full capacity … I think that there’s going to be this increased demand in these dense downtown condo areas.”

Don’t buy a home just to own ‘something.’

Nadine Pierre, a realtor with Allison James Estates & Homes in South Florida, said she’s putting listings on the market at 8 a.m., and by 5 p.m., she’ll already have 20 offers. In an effort to drum up inventory, she’s been sending out letters to the neighborhoods her clients are looking at in hopes of finding a “dormant seller.”

Clemmons said that some of his buyers have started putting offers in on “coming soon” listings, sight unseen.

But a recent survey from Bankrate found that 64% of millennial homeowners are experiencing regret after buying their current home, mostly due to unexpected costs. Most said that maintenance and other costs are too high, their home is in a bad location, or they bought a house that’s either too big or too small for them.

Scott Trench, the CEO of the real-estate-investing resource BiggerPockets, recently told Insider’s Taylor Borden that buyers should think twice about trying to purchase a house right now.

“Frantically trying to buy ‘something’ is a great way to make a bad purchase,” he said.

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Millennials who snapped up homes in the hot real estate market reveal their biggest regrets, from unexpected costs to high mortgage payments

House for sale sold sign
  • A new Bankrate survey found that 64% of millennials regret buying their current home.
  • Their reasons range from unexpected maintenance costs to high mortgage payments.
  • The frenzied market has led many buyers to snap up homes, skipping inspections and due diligence.
  • See more stories on Insider’s business page.

Millennials who may have rushed to snap up homes during the pandemic are beginning to regret their purchases after discovering sky-high maintenance costs and a mortgage that’s too expensive.

According to a new survey from Bankrate, 64% of millennial homeowners are experiencing regret after buying their current home, mostly due to unexpected costs. Bankrate surveyed 1,425 homeowners between April 21 and April 23 and found that 41% of homeowners overall are feeling dissatisfied in at least one area.

Among homeowners between the ages of 25 and 40, their biggest regrets range from the size of the home to the location:

  • 21% of millennials said the maintenance and other costs are too high
  • 15% said their current home is in a bad location
  • 14% said they bought too big of a house
  • 14% said they bought too small of a house
  • 13% said their mortgage payment is too high each month
  • 13% said they overpaid or paid too much for their home
  • 12% said they didn’t get the best mortgage rate
  • 9% said they don’t think the home was a good investment
  • 5% said they had other reasons for regretting their purchase

Expenses like repairing a roof or fixing appliances or heating and cooling systems seem to be tripping up millennial homebuyers the most, Mark Hamrick, Bankrate.com’s senior economic analyst, said in a blog post.

“It isn’t a question whether such expenses arise, only when and how much they will cost,” he said.

Read more: Home prices are soaring across the US, but these 11 places are the wildest right now

The real estate boom in the US is being driven by a combination of factors – primarily, low interest rates and a pandemic-induced desire for more space and distance from crowded city centers. It’s led to a chaotic market where bidding wars are the norm, prices are soaring, and inventory has hit record lows.

Real estate agents recently told Insider that they saw the market begin to shift in the spring and summer of last year with no sign of it slowing down in 2022.

Glen Clemmons, a broker and realtor for Costello Real Estate and Investments in North Carolina, told Insider that some of his buyers have started putting offers in on “coming soon” listings, sight unseen; Nadine Pierre, a realtor with Allison James Estates & Homes in South Florida, said she’s putting listings on the market at 8 AM – by 5 PM, she’ll have 20 offers.

That frenzied market is leading hopeful buyers to skip steps they may have normally taken in order to nab a house. The Wall Street Journal’s Candace Taylor reported earlier this year that buyers had started skipping due diligence and waiving inspections, only to discover costly issues down the line like wasp infestations or destructive local woodpeckers.

Scott Trench, the CEO of the real-estate-investing resource BiggerPockets, recently told Insider that the current market should make buyers think twice about trying to purchase a house right now.

“Frantically trying to buy ‘something’ is a great way to make a bad purchase,” he said.

Read the original article on Business Insider

Realtors reveal their best tips for winning a bidding war amid a feverish real estate market where demand is ‘through the roof’

Home for sale open house
People wait to visit a house for sale in Floral Park, New York.

  • With how frenzied the real estate market is right now, a bidding war is almost a given.
  • Realtors shared how to make an offer stand out, from waiving contingencies to offering to rent back.
  • One realtor noted that writing a thoughtful letter can sway a seller in your favor.
  • See more stories on Insider’s business page.

In California, one $400,000 house got 122 offers in a single weekend. In Pennsylvania, buyers are putting in upwards of 20 offers, only to be outbid every time. And in upstate New York, sellers are turning around on buyers at the last second and accepting a higher offer.

This is the ultra-competitive real estate market in the US right now.

Insider spoke with eight real estate agents from across the country who all described a hectic market where inventory is low and prices are soaring. In many markets, buyers are practically guaranteed to end up in an aggressive bidding war with other hopeful buyers.

Sean Waeiss, a broker and the owner of Wise Property Group in Austin, told Insider that demand is “through the roof.”

“We have 10 to 15 buyers for every seller that we have and … when we’re submitting offers, they’re getting 10, 12, 15, 18 offers on the house,” he said.

So now that a bidding war seems almost inevitable, what can a buyer do to stand out? Below, realtors share their best tips for homebuyers hoping to nab their dream home.

Read more: Confessions of pandemic homebuyers: 6 families open up about overpaying, losing bidding wars, and settling for fixer-uppers in a bonkers housing market

Make an aggressive offer

For anyone hoping to win a bidding war without coughing up more money, Waeiss had some hard truths to share: You have to be able to go over list price, and you have to have a lot of cash.

Waeiss said he’s telling clients to be “aggressive” with their price, but that he’s also cautioning them to be mindful of their cash reserves. In Austin, many buyers are waiving appraisal contingencies to make their offers more appealing, which means buyers have to cover the extra money if the house appraises for less than asking price.

“Buyers are having to bring a ton of cash to the table,” Waeiss said. “You’ve got to be able to have a strong down payment and you have to be able to overcome a low appraisal.”

No matter how aggressive a buyer’s offer, however, Waeiss said he won’t get clients involved in “out of control” bidding wars, because the likelihood of winning gets slimmer and slimmer.

“If I were to call that agent and they say, ‘We have 36 offers,’ I would call you back and say, ‘Let’s move on,'” he said.

Pay extra to have the home taken off the market

Sara Olvera, a real estate agent with Dream Town Realty in Chicago, told Insider that she’s found success with offering extra money to get a listing taken down quickly.

“I have a client right now that we were looking at three-bedroom townhomes, and those are hot because in the city, there’s not a lot of single-family homes under a million dollars,” she said. “We got into a bidding war and we paid $30,000 extra than asking price to just take it off.”

Olvera said the seller’s agent wanted to wait several more days in order to see the highest and best offers, but by paying extra to get it taken off the market, the buyer circumvented what could have been a more competitive bidding war.

“Sure enough, they took it off the market and we got it and we’re closing next week,” she said.

Pay attention to presentation

When it comes to actually crafting your offer, presentation matters, said Jared Goodloe, a realtor with Compass in Brooklyn.

Goodloe’s advice was literally to dot your I’s and cross your T’s – make sure words are correctly capitalized, and any scanned documents should look clean and professional.

And don’t, under any circumstances, hand-write your offer.

“If it’s smudgy … you’re not taking me serious,” he said. “Someone that’s wanting to take the time to type up an offer, they’re serious.”

Don’t make your offer contingent on selling your current home

In Raleigh, North Carolina, where Glen Clemmons is based, most sellers aren’t accepting offers that are contingent on the buyer selling their current house.

Clemmons, a broker and realtor for Costello Real Estate and Investments, told Insider that in situations where two offers are essentially apples-to-apples, sellers are almost always opting for the offer that’s not reliant on another sale, since there’s always a risk the buyer’s current home won’t sell.

“So unless you do a home equity line of credit to pull that equity out of your house that you need to sell and put it as a down payment for the next house, then you are not writing a contingent offer,” he said. “It’s not getting accepted.”

Offer to rent back the house

In some situations, giving the seller more time to stay in the home can make an offer more appealing, Nadine Pierre, a realtor with Allison James Estates & Homes in South Florida, told Insider.

“I’ve won offers only because my buyers were able to allow the seller to reside in the home for 30 days,” she said.

Of course, that’s easier for buyers who are looking for a second home or weren’t planning to move in right away to allow for renovations, but having some flexibility with the move date – and whether you even want to charge the seller rent to stay a little longer – can make your offer stand out.

“The sellers are selling very quickly, but then they need to find a place to live as well,” she said. “Sometimes, having that flexibility as a buyer where you’ll tell the seller, ‘Hey, I’ll purchase the property, but I’ll give you 60 days where you can stay there, rent-free, until you find your house,’ so that the seller on the opposite end doesn’t feel so rushed.”

Write a personalized letter

Writing a letter to the seller could give buyers a leg-up in a bidding war, said David McDonald, a real estate specialist with DMD Real Estate Group in Seattle.

While there’s no guarantee it’ll make a difference – “Some sellers will be like, ‘I don’t give a hoot about no letter, give me my money!'” McDonald said – you won’t know until you try.

McDonald advised keeping the letter light and brief, and using it as an opportunity to introduce yourself and to let the sellers know who you are, what you do, where you work, and if you have any kids. Some buyers choose to include a photo as well.

“Some people will say [the letter is] completely pointless. That’s a little bit more of a cynical perspective in my opinion,” he said. “No judgment, but that’s not an approach I like to consider, because you just don’t know who you’re working with on the other end.”

Read the original article on Business Insider

Realtors reveal the 5 things they wish sellers knew before listing their home amid a hectic real estate market

GettyImages 79425812
A for sale sign on a single family home in Vallejo, California.

  • It may be a seller’s market right now, but realtors say there are still some pitfalls to avoid.
  • Be thorough when you disclose issues with the house, a Silicon Valley realtor warned.
  • Austin and Seattle realtors say to make sure to have a solid plan of where you’re going next.
  • See more stories on Insider’s business page.

If you’ve been paying attention to the real estate market over the past several months, you already know that, in a lot of ways, sellers have the upper hand right now.

In many markets nationwide, inventory has dipped to historic lows, resulting in more potential buyers than there are available homes and soaring home prices. In some cities, real estate agents are reaching out to homeowners who had no plans to vacate their homes and convincing them to sell, resulting in lucrative deals for homeowners.

Read more: Home prices are soaring across the US, but these 11 places are the wildest right now

While the wild real estate market may favor sellers right now, realtors warn that there are still pitfalls for those thinking of selling their homes. Insider spoke to five real estate agents from across the country who shared their best tips for sellers looking to take advantage of the market.

Don’t take the seller’s market for granted.

Katie Day, an agent with Coldwell Banker Realty in Houston, told Insider that even in a seller’s market, it’s more important than ever to have the right realtor.

“For a lot of sellers, I’m sure they’re thinking, ‘Oh, it’s a sellers market. I can put the house in the market for whatever price I want and I’ll get all of these offers,'” she said. “If you’re receiving 20 offers, do you really know how to sort through those to see which one is the strongest?”

Day said the right agent will be able to spot factors like whether the buyer used a local appraisal company or went with the best mortgage lender, and will able to ensure sellers make it to closing.

Don’t be overly precious about your home.

Jared Goodloe, a realtor with Compass in Brooklyn, advised sellers to look at their homes with a clinical eye and not to get too hung up on their personal attachment to the space. In an area like New York City, where buyers have the choice between an older home with character or a brand-new condo, sellers should be realistic about what they have to offer.

“Remove the emotion as quickly as possible,” he said. “If you’re in the resale process, the renovations that you did to your home 10 years ago don’t reflect the current market, especially when you have nothing but new development going around you.”

Be transparent and thorough in your disclosures.

Silicon Valley realtor Mary Pope-Handy said it’s crucial for sellers to disclose anything and everything that could be perceived as an issue with the home – and that could range from flooding in a crawl space to a next-door neighbor who likes to smoke marijuana in the afternoons.

Pope-Handy said she’s walked away from listings where a seller doesn’t want to disclose something that happened to the house in the past. If the seller doesn’t disclose an issue, it could easily result in a costly lawsuit down the road, she said.

“I think that they don’t understand that even if they tell something negative, the buyer will accept almost anything if you tell them,” she said. “So I would say, take your disclosure obligations very carefully, because it’s the right thing to do – and because it will net you more money.”

Know where you’re going to go.

It may be a seller’s market right now, but realtors warned that there’s a hidden downside for sellers: They’re often about to become buyers in the same market.

That’s making it trickier for sellers who are looking for move locally, said Sean Waeiss, a broker and the owner of Wise Property Group in Austin. Because the market is so competitive, it’s harder to put an offer in on a new house that’s contingent on you selling your current home – “that offer would just not be accepted or entertained because it’s so competitive,” Waeiss said.

“So what sellers are doing is they’re selling without having their new home identified, and then they’re trying to compete in the marketplace that they just sold in,” he said. “You can submit offers, but if you continue to lose, you run out of runway. All of a sudden, now you’ve got to move out of your place and you don’t have a new home.”

When it comes to moving to a new city or state, David McDonald, a real estate specialist with DMD Real Estate Group in Seattle, said to start at the macro level before getting bogged down in listings.

“Explore the market over there first and then work yourself back down to the listing,” he said.

Be ready to make a move.

Goodloe, the Brooklyn realtor, said it’s important for sellers to realize that this process may happen more quickly than they’re expecting, and that they should be ready to jump on the right offer.

“You never know when your offer’s gonna come,” he said.

Read the original article on Business Insider

Real estate agents reveal the 6 things they wish potential homebuyers knew going into the process

Open house sign in front of house for sale
  • The US real estate market has been in a frenzied state since last year.
  • It’s led to inventory shortages, high prices, and frequent bidding wars for potential homebuyers.
  • Insider spoke with five realtors who shared their best tips for prospective buyers.
  • See more stories on Insider’s business page.

So, you’re thinking about buying a house – join the club.

Millions of people across the US have spent the last year in a homebuying frenzy, snatching up available inventory and sending prices through the roof. That demand, driven by a pandemic-fueled desire for more space and a safe haven, isn’t expected to slow down anytime soon.

In fact, a recent report from Black Knight found that there are currently 40% fewer homes on the market than in 2020, while median sale prices have risen 17% nationwide.

Read more: 3 homeowners weren’t planning to sell – until a real-estate agent reached out with an offer they couldn’t refuse. Here are their stories.

Still, if you’re hoping to take advantage of historically low interest rates and settle into a home to call your own, it’s not impossible – you may just need to be especially savvy.

Insider spoke with five real estate agents based throughout the US about the homebuying process. They revealed their top tips for buyers, and the guidance they find themselves repeating to clients over and over again.

Be open-minded.

Sean Waeiss, a broker and the owner of Wise Property Group in Austin, told Insider that it’s important not to have too many preferences set in stone going into the homebuying process.

“Some people are like, ‘Oh, I just want to own a home,’ but they have a lot of parameters: ‘I want to be close in. I want to have a short commute. I want something that’s not dilapidated. I want an extra bathroom,'” Waeiss said. “Well, you’re going to put yourself in a position where you’re not going to end up buying anything.”

Adjust your expectations.

Compass realtor Jared Goodloe, who’s based in Brooklyn, said New York City’s unique real estate market can trip up buyers who are unsure whether they want a co-op unit or a condo, or a new or older property.

“Resell and new development are two different things,” Goodloe said. “So you can’t expect the same amenities, the same upgrades as what you’re going to see with a new development.”

Be prepared for an emotional process.

After a hectic few months in the real estate market, even realtors are starting to feel the emotional toll, Glen Clemmons, a broker and realtor for Costello Real Estate and Investments in North Carolina, told Insider.

“I feel beat up, they feel beat up,” he said. “I had one client who wrote 15 offers before they finally got one, and that’s exhausting.”

Clemmons said his clients are going to multiple showings, putting in several offers, and generally being put through “the emotional roller coaster of, ‘Are we going to get this one?'”

“What I would say is, check your heart when you walk through a house,” he added. “[Going to a showing is] not a guarantee that you’re going to get it. Put your best foot forward, and be patient.”

Be informed, but don’t overdo it.

Goodloe issued the same advice many healthcare professionals likely tell patients: If you have concerns, don’t fall down a Google rabbit hole.

“Google helps you and it aids you and it’s a good cross-reference, but when you hire a dynamic team, I would use my team as the biggest resources – that’s your inspector, your real estate agent, your attorney, your lender. They play a pivotal role in this,” Goodloe said. “I always tell my people, Google, feel free to, but also use me as a resource.”

Choose an open-minded realtor who has experience winning a bidding war.

Given the low inventory and rising prices for homes in the US right now, buyers have a high likelihood of ending up in a bidding war. According to Katie Day, an agent with Coldwell Banker Realty in Houston, working with an experienced agent is a must.

“It’s super important to have someone helping you that understands how to navigate these times and how to navigate the market, and has a track record of winning in multiple-offer situations and negotiating,” Day said.

Sara Olvera, a real estate agent with Dream Town Realty in Chicago, also echoed the importance of the right realtor, and suggested looking for someone who’s willing to get creative when, say, you have a limited budget.

“Sometimes as professionals, we kind of are quick to just be like, ‘Nope, that’s not going to work. You’re not going to do that.’ I’ve had clients come to me and say, like, ‘Hey, [another realtor] said that I couldn’t do that,'” Olvera said. “And I’m like, ‘Well, why not? Let’s play with the numbers.'”

Have patience.

According to Goodloe, the home-buying process is still taking “just a tad-bit longer” due to the pandemic, and he said he urges his clients to be patient.

“I always tell my buyers, focus on something else outside of the transaction,” Goodloe said. “So whether that’s meditating, hanging out with your friends, going on a walk, do something outside of the transaction.”

He did issue one warning though: Don’t spend the time car-shopping, as taking on an auto loan could interfere with a buyer’s preapproval.

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