orlando miner: homebuyers' secret weapon: navigate the housing market, making offers & understanding property values

Hello everyone, welcome back to the channel. We are talking about how to navigate this crazy hot market. New York Times wrote an article and they're explaining how to get through this crazy market. I want to go through it and break it down. It does have some good nuggets in here, but I just want to add a little bit of commentary in here to expound upon some of the ideas that they're saying, which let's see. Let's get to it. It says how to navigate a hot housing market. It says competition for homes in many cities is leading potential buyers to take steps they may not have considered in a short time ago, including waiving inspections. We spoke about this guys multiple videos ago. You do not want to waive inspections. The home buying market this spring is not for the faint of heart. The main challenge is that the supply of homes for sale in most parts of the country continue to fall short of demand. That is pushing up prices to heart-stopping levels in many markets. A lack of construction over the past decade, plus pent-up demand for pandemic shutdowns has unleashed a national seller's market. The median price for a single family home rose 18% in March to almost $335,000, a record high. Now, we know this guys, like lumber prices, we know the pandemic as far as the money that's being flushed into the economy. All of these things have caused the market to do exactly what it's doing now. Lack of supply, meaning lack of houses that are available to purchase, and we're not talking about lack of supply of houses at like the higher tier, because when you get up to the higher tier guys, like if you get up to three, four, $500,000 houses, now I'm not talking about on the coastal cities, I'm talking about like Midwest, Midwest, Southern. Once you get into that range, that's a different type of buyer. We're talking about houses that are between that $100,000 to $300,000 range. Those properties go like that guys, they're like super quick to go, and everybody is fighting over those type of properties because they are like the really affordable housing, right? They're really affordable houses. So it really makes sense. So what they're talking about is true, obviously in here. Then it says, the unusual tips like getting pre-approved for a mortgage apply more than ever, but competition in many cities is leading potential buyers take steps they may not have considered even a few months ago, including offering tens of thousands of dollars above the asking price, agreeing to let the seller live rent free. Come on guys, you're paying for a house, and then you're letting the people that you bought it for, stay there for free? It says that they let them stay in the house for several months after the closing. And then it says waiving certain contingencies like the right to inspect the house before buying. Like I said before, guys, this waiving appraisals, waiving inspections in a house, it is insane. Do not do this guys. I understand that you may want a house. Like I want you to really think about it. Just think about it. This is the biggest, the biggest purchase of your life, and you're going to waive inspections to see if anything is wrong with it. I understand people want to buy houses, but let's just put this in perspective. If you were going to spend $250,000 on the Lamborghini, would you just pay for it? Not test drive it, not look at it, not do anything, just say, yep, I'm going to buy this used Lamborghini from this person for $250,000, sight unseen, no inspections, no nothing. Would you do that? So why would you do that with a house? I mean, why would you do that with a house? You won't do it with a car. A lot of people won't even do it on the smallest items, you know, that are less than $100. So why would you do it on the $200,000 home or $300,000 home? It makes completely no sense. No sense. So please, please, please, as a caution, a warning, do not give up your right to inspection. If a seller is asking you to do that, that's not the house for you. If that is a contingency for you to get accepted to purchase that house, that house isn't for you guys. Don't give up your right to that. And then it says, waiving inspections has long been common in competitive housing cities like Seattle, but it is becoming more frequent elsewhere, real estate professional says. It says buyers will sometimes send personal notes to sellers to distinguish themselves from others buying for the same properly. Though realtors discourage this practice, such dear seller letters include an introduction to the to the buyers and, you know, they give compliments about the house. A real estate agent in Austin sometimes invites buyers to write letters, he said. It never hurts. He said he once had a seller with a strong sentiment attachment to the house pass over the highest offer because the potential buyer failed to write a letter while others buying for the home had all done so. Now, we talked about this also, guys. We talked about this also. Yes. Is there going to be this needle in a haystack person who's just has such an attachment to the house that they want to be piled on with compliments about how nice the house is, how well they kept it up? Yes, there's going to be people like that. You cannot control the temperaments and the things that make a seller want to sell to you, but you can strategize and understand why the seller is selling the home. And the reason most most we're going with the most, we're not going by particularly like this guy. We're going by the most. Most sellers are selling for the cash, the money like that's what they want. And so when you write these letters, these letters, these sympathy letters, as they call it are in the last video was love letters. They come with all types, dear seller letters. When you write all of these letters and you believe that this is going to really help you, I mean, it doesn't hurt like the realtor said, but but but just know that more than likely if you're not coming with the money, if you're not overpaying for the price of the house, you're probably not going to get that house. If someone is paying 50, 60, 70, 100 thousand dollars over the house and you're just paying asking price, I'm pretty sure they're going to go with a hundred thousand dollar offer over asking, especially if that person is. You look at their closings and things of that nature and you see that they're reliable. They can actually close their eyes, going to be tough. That letter really won't mean something. But like this guy says, it can't hurt. But I kind of disagree with that in the sense like you really are kind of opening the door to individuals to kind of judge you. So if someone came to me and said, Orlando, should I do those type of letters? I would say probably not because you're opening the door for someone to kind of pass some judgment on you. I know it's not fair, guys. It's not. But that's just the way it goes. And then it says, but agents often discourage sellers for reviewing such letters out of concern that the letters may reveal details about the buyer, family status, race, religion that could inadvertently cause sellers to run afoul of the fair housing laws in their decision making. That can actually backfire, a real estate agent said. Buyers may note, for instance, that they look forward to gathering around the fireplace for Christmas or that they find the home attractive because it's near a mosque. Should the seller be influenced by those details, the thinking goes other buyers whose offers were rejected could potentially challenge yourself, claiming that they were victims of religious bias. Now, I just said this, right? I just that was what I just spoke about, is that when you go ahead and you send these letters and you say things like Christmas, people start saying, OK, they celebrate Christmas or like you just said, when you're talking about a mosque, like I love it because it's really close. My people think, oh, Muslim and you never know what other people biases are and it's not right. It's really not. And it's against the realtor rules and bylaws and all that other stuff. We just know it's wrong, right? It's wrong. You're not allowed to do that. That's not what you're not supposed to do. But sellers will do that in their mind and say, you know what? I don't want to sell to this person because of this. And you open that door when you do these letters. And I know what a lot of people are saying, well, you know what, if they're going to discriminate against me because of whatever I put in this letter, then, you know, so be it. Then let them, you know, deny me. And that's the risk that you run. I'm not saying that you shouldn't do it because of that. I'm saying that you run the risk of someone denying you because of that. So if you want to eliminate as many barriers as possible for you to get the home, then just follow these rules. So we don't want to do any letters. We don't want to overpay. You don't want to give up your inspections. We don't want to do any of that. So then it goes on to say, in some state, buyers may offer direct incentives to sellers outside of the purchase price, sometimes called option money. It works like a bonus. She said, noting that the practice is allowed, although not necessarily widely used in Georgia. She cautioned that buyers and agents should clarify their state laws. But if you can make it work, she said it is a very strong tactic. Basically, you're kind of giving a bonus outside of closing to the seller like, oh, I'm going to give you X amount of money outside of closing if you give me this loan. Now guys, you have to be extremely careful with this because you have to make sure that this is not illegal in your state. It is something that is done right. That is not against the rule in certain states. OK, so if you're going to do this tactic, you're going to go with this strategy. Make sure that it is within your right and that state's law for you to do this. And it is a strong tactic. If you're allowed to give someone extra money outside of closing, which is I wonder why would you want to give someone outside? Why wouldn't you do it inside of closing? But I kind of understand it when it comes to financing and things of that nature, because there are some rules when it comes to how much money you're allowed to give to the seller as far as credits and all that other stuff. So now that I think about it, that does make sense. At the last thing that I want to say here says shoppers need to be patient, plus a willingness to move fast. Miss Neal said Kim Celia, a technical support director for an online education, said she began working with Miss Neal in January to find a home in Atlanta Midtown District. She was a pre-approved for a loan with a local lender. She found the property she loves, but she hesitated when Miss Neal urged her to make an offer immediately. And basically what it goes on to say that she made a mistake not making an immediate offer. And let me tell you this, guys, in this market that is this hot, you cannot sit around and think, you know what? I'm going to take a week. I'm going to take a couple of days to decide if I want to make an offer on this house. If you're going to go out and you got pre-approved for a loan and you're going to make a decision to purchase a home. When you go out and find these homes, you have to put an offer on them immediately. You can't sit around and wait and think, oh, I'm going to wait a week. I'm going to wait two weeks. Let me think about this. You're going to lose the house. That's just what it is. Houses are getting bought up before they even hit the MLS. When a sign is in the yard, before it hits the MLS, people are already putting in offers on homes. So if you see a house on the MLS, you should already know that there are other people competing for that house probably before you even saw it on the MLS. So you don't have the time to sit back and go, well, let me think. That fireplace, I really didn't like it. That backyard. Let me go speak to some friends and you'll lose the house. You'll lose the house, guys. So just know, make your decision immediately. Like I like this house, put an offer on it. I like this house, put an offer on it. You have to make multiple offers on houses, guys. So if you go to one house, make an offer on that. You see three, four other houses, make an offer on those. Then if multiple offers get accepted, then now you have a choice of deciding exactly what you want to do, guys. So to wrap this up, guys, what am I saying in this video? I'm saying number one, don't overpay for a property. Number two, do not give up your right to pass up inspection. Number three, if you're going to use a strategy that involves writing letters and doing all that, just know the risks that are involved with that. You could be giving the seller ammunition to discriminate against you guys. So just be wary of that. And then also to look for other strategies that are working in your area. Like I just spoke about the options where you can pay outside of closing. If you're going to do something like that, once again, make sure that it's legal in your state, that you're allowed to do that. Speak to a real estate professional and ask them, can you do that? Number five, just know that if you are not going to make multiple offers or you're going to take your time to put in the offer, that you're going to lose the bids on the house, guys. So once again, guys, I hope you enjoyed this content. I need you to watch this video. I need you to watch this next video. It's about the housing market and how to get you into your first rental property. I'll see you guys in the next one. Thanks.