As a seasoned realtor and property manager, who has lived in Colorado for more than twenty years, its good to be aware that while hot markets come and go, sound real estate practices remain the same. So, no matter how frantic you are feeling about ever owning a home in this over the top market, take a deep breath and consider the following points before making an offer.
Is this a home and neighborhood you can see yourself living in for the next five years?
Markets can change as suddenly as a Colorado snowstorm. Today’s seller’s market could be a buyer’s market next summer, with a surplus of inventory languishing on the market and sellers doing anything they can to encourage an offer. Just look back to 2008, not so long ago. So, if you’re buying a home to live in, make sure you’re not banking on being able to trade up, or down, until the market is in your favor again.
Is your employment situation stable?
Trying to sell a home quickly because you either lose your job or get transferred can be one of the most stressful situations you can face in real estate. While there are no guarantees in life (or jobs), make sure change isn’t in the wind when you write up an offer.
Are there issues with the home that would make resale a challenge?
A busy street, no bathroom on the main floor, a steep North-facing driveway, a one-car or tandem garage–while you may be willing to overlook these design issues just to get a house, any house, in a different market, these might make the property less desirable to future buyers.
Can you afford it?
If a home listed at 350k is currently actually selling for closer to 380k, but the appraisal will come in at about 360k, can you afford it? You’ll need to come up with an extra 20k cash at closing, to cover the appraisal, as well as extra cash each month for a larger mortgage than you had anticipated.
In this type of market, you might do better setting your sights on a smaller, less expensive home, especially if you’re anticipating paying more than the asking price. Then, when the market settles down again, at least you’ve got a foot on the rung of the ‘property ladder’ and can upgrade to a larger home when the time is right.
Nancy Page Cooper owns and operates Link Real Estate Group in Castle Rock, Colorado. She works with buyers and sellers throughout the Denver Metro area and outlying cities.