You have thought through your alternatives, abandoned unrealistic goals, and tackled the trade-offs. Now, you can focus with confidence on specific types of housing in targeted neighborhoods and communities. At last, the “focused home search” can begin.
Perhaps you have decided to look for a house with at least a one car garage and 3 bedrooms in south Boulder. Or maybe a house with 3 bedrooms and 2 baths in Louisville or Lafayette is more to your taste. On the other hand, your dream home might be a 1500 square foot house in the foothills above Boulder.
The Focused Home Search is Systematic
Assuming your search parameters are realistic, the focused search is usually systematic, making it the easiest part of the process. In the end, the focused search is simply a matter of finding properties that meet your criteria and touring them. Your goal is to find one that works for you and will make a good resale property when the time comes. The nature of your systematic focused search depends on when you jump into the market.
Searching in a Buyer's Market
If your search is taking place in a buyer’s market, there may be too many available homes for you to visit them all. You may have to eliminate some areas before you focus on specific homes you want to see. Even then, you may end up with several homes that work for you.
In a buyer's market, you may have a number of options. If you have time constraints, like the end of a lease, you may have to choose quickly among several good options. That's not a bad position to be in, but not always easy either. If you have no time constraints, you might decide to monitor the market for several weeks or months. If this is your strategy, the decision might be simple when something new stands out from the bunch. A buyer in this situation is not worried about losing out, since there are several good options to fall back on if nothing better comes up. This is a great position for a buyer to be in!
Searching in a Seller's Market
In a hot seller’s market, the buyer’s task is very different. A seller's market demands that you make an offer immediately when a good house hits the market. Otherwise, you’ll learn someone else has it under contract the following day.
Buyers face several difficulties in a seller's market that are not encountered in a more balanced market. First, it's difficult for buyers to get a clear sense of the options available to them when there is so little for sale. When 20-60% of homes sell in a few hours or days, great homes are snapped up before new buyers can jump on them.
Our Strategy in a Seller's Market
To deal with this problem, we drive by homes that have already sold to get a feel for the neighborhoods. Another strategy we use is to set up showings of homes that are already under contract. This gives our buyers some idea of what they can expect to see in the near future. Since buyers must make quick decisions in a seller's market, having a very clear picture of the options is critical.
The Balanced Market
Even in a more balanced market, between 5% and 10% of homes typically sell in 5 days or less. The ones that go under contract this quickly are not a random selection of houses. They tend to be in better condition, in better locations, and are better priced. In any market, you could find yourself competing with another buyer for an outstanding property.
A Good Buyer's Strategy in Any Market
You may need several months to search for a home. Try to maximize your flexibility with respect to when you can close and move. If you are moving into the area, this usually means moving here and renting for a bit while you look. If you need to sell a home first, you may need to arrange a bridge loan. Selling, then buying, often means a double move. For those who are renting, try to negotiate a month-to-month lease. Try not to put yourself in a position where you need to buy something in a short time frame. Finding a good property in that situation will require a lot of luck. You may lose out to a more flexible buyer who can accommodate the seller’s preferred closing dates.
Get to Know Your Market Niche Quickly:
Once you have your focused home search, try to look at the available properties as quickly as you can. Include outstanding properties that are under contract. You'll get a better feel for the market, so you can make the right decision when the time comes. In the beginning, if you look only at available properties, you'll get a distorted picture of the market. The available properties are not necessarily the best examples of the inventory. Properties that are under contract are the ones other buyers thought were the best.
Know What Sold in Your Market Recently:
Another way to develop market knowledge quickly is to study the properties that have recently sold. When we begin working with a new client, we start by helping you gain an understanding of your market. We print out listings matching your criteria for all the homes sold in the past 6-12 months. We plot these on a map for you so you can drive by and look at the houses and the neighborhoods they’re in. An afternoon driving by these homes will give you a clear picture of the kinds of homes that are likely to come on the market over the next several months.
Once you’ve developed a good feel for your market segment, we'll organize a plan of action for seeing new listings as soon as they hit the market. If you want to see and make offers on the best properties, we need to be on the ball.
Once you get a clear fix on the characteristics and location of your ideal property, we can contact the owners of relevant properties for you. We'll send a letter asking if they are planning to put their property on the market in the near future. Very often, this creates a win-win for both buyer and seller, and we do several transactions this way every year. This “proactive approach” gives our clients a chance to see the property without competition from other buyers. Buyers have the time to think calmly and rationally about the property before making an offer. As a bonus, working directly with an owner saves our buyers some money since there is no need to pay a listing commission.