Welcome back to the Tom and Joanne Team blog and this week we would like to discuss being responsible in the home buying process. Joanne and I are seeing a lot of buyers acting emotional in this tight inventory environment. As of the writing of this blog, we have 22% fewer homes for sale than this time last year, and the Fed is increasing the banking rates which are starting to impact the mortgage rates and buyers are feeling the pressure to buy now.
At the Tom and Joanne team, we want to “Create Clients for life,” and in order to do that you must understand your personal “BATNA”. You may ask what is a “BATNA” and it is “Best Alternative to a Negotiated Agreement” and for most buyers it is the ability to walk away. Joanne and I have been selling real estate for 13 years and there is always another house to buy! It is important to make sure that you are clear on your vision of the timeline for the home purchase. You must be clear and honest about the both the pros and cons of the home. You must also understand the risk of waiving contingencies such as home inspection, appraisal, and the mortgage contingency. Do you have the cash to cover issues that may arise?
Our philosophy is only waive contingencies if the buyer is seasoned and has capital beyond a 20% down payment. Tom often jokes that you can’t fix a home that you don’t own, but you must be in the financial position to make the repairs. The government has made great regulations to protect consumers from the banking industry, but right now consumers must protect themselves from their emotions. There are no regulators out on Saturday and Sunday policing buyers and telling them that this may not be a good purchase. We want people to make sure they are doing their due diligence. We have had several buyers secure properties this spring, but we have made sure to have the above conversations with our clients.
If you are in the buying market and are frustrated with things email us to set up a time to have coffee.
The Tom and Joanne Team