I know there will be naysayers who deny the existence of widespread multiple-offer situations, but they have been snowballing outward from Boston to the suburbs over the past few months. The common factors I have seen in these situations are 1) New listings which are 2) Reasonably priced for the local market and are 3) In move-in-to-showroom condition.
In these situations, buyers can let their emotions get the better of them, and engage in risky behaviors. I have even heard that in some communities, listing agents and buyer agents are recommending to prospective buyers not to bother with inspection contingencies or mortgage contingencies, and buyers are going along.
Now, of course, what a client chooses to do or not to do is up to them to decide. And there are possible circumstances where a certain buyer here or there could forgo those protections and incur little risk.
But for nearly all buyers, making an offer on a home without these protections is very, very dangerous, indeed. If you are contemplating doing this, first consider the worst-possible consequences before making this choice.
If you want to find a relative bargain and avoid feeding frenzies, look at “stale” listings that have already been passed over by the multitudes. Look beyond the surface and consider homes which are solid in the factors which you cannot personally change, such as location, the size of the lot, proximity to the things that are important to you, and the quality of the school system. (The perception of a city’s or town’s school system will be a huge factor for resale value, so you’ll benefit from one with a good reputation whether you have school-aged children, or not.)
For these homes, factor in the cost to address any shortcomings, but try to look beyond the current state of factors you can remedy. These include cosmetic issues such as bad paint colors or floors in need of refinishing, 1960s-era kitchens and bathrooms, and even some more significant problems requiring plumbing or electrical work, repair of termite damage, or replacement of the roof or the heating system.
Homes with these issues tend to languish on the market, it’s very unlikely you’ll get into anything resembling a bidding war, and you’ll probably save considerable money compared to chasing a home on which a seller has spent $10,000 to spiff it up and sell it for $50,000 more.
And remember: There will always be another house. No two are exactly alike, and each one has its own package of positive and negative factors. Maybe you’ll never find one you like as much as the one you’re thinking about pursuing right now; but odds are you will. And you might even find one you like better and/or costs you less, if you know where and how to look.
