Month: July 2014
The low supply of homes for sale in many markets means buyers must be prepared for bidding wars. Buyers should be strategic in how they present their offers, and avoid paying too high a premium for their “perfect” property.
Obtaining written confirmation of preapproval for a mortgage is a must, real estate agents say. Sellers looking over multiple offers will likely discard those on which financing is not assured.
In highly competitive markets like New York City, where bidding wars are now the norm, buyers should look in a price range slightly below their maximum in case they have to bid up, said Gea Elika, the principal broker at Elika Associates in Manhattan. “Today, you usually have to overpay to get something that you like,” he said. “The question is: How much do you overpay and how quickly will you recoup that premium?”
Making that calculation can be difficult, but at the very least, Mr. Elika advises buyers not to overpay by much if they plan to stay in a property for only a few years. He usually strikes a verbal agreement with the seller’s broker that his clients will be given a chance to counter in the event of a competing offer. But buyers in many markets are formally inserting that option into their offers in the form of what is known as an escalation clause, said Don Frommeyer, the president of the NAMB, the Association of Mortgage Professionals (formerly the National Association of Mortgage Brokers).
Read more about real estate bidding here.
WASHINGTON — Sales of previously owned homes in the United States rose more than expected in May, and the stock of properties for sale was the highest in more than 18 months, suggesting that housing was pulling out of a recent slump.
The National Association of Realtors said on Monday that existing-home sales increased 4.9 percent last month to an annual rate of 4.89 million units. It was the largest rise since August 2011.
Economists had forecast that sales would rise 2.2 percent, for 4.73 million units annually.
The housing recovery stalled in the second half of 2013 as interest rates increased and prices rose while the supply of properties for sale dwindled.
Despite the second consecutive months of gains, sales were down 5 percent compared with May 2013. They remain down 9 percent from a peak of 5.38 million units, hit in July.
Read more about May’s sales here.