Its all over the news “Buyers are back in town” and homes for sale in Massachusetts are seeing a lot of activity. An article I read recently in the Boston Globe “desperately seeking sellers” tells the story of a sellers market and the shift between supply and demand. The Warren Group a local company out of Boston that tracks real estate in Massachusetts reported the month of June saw a 9 percent increase year over year bring the median value of a single-family home to $350,000.
Regardless of what is causing the low inventory of real estate in Massachusetts, more homebuyers are competing for fewer homes’, which gives the Seller advantage in this market. Competing offers and bidding wars are replacing the days of the “low ball offer”. When you have this type of paradigm shift a perspective homebuyer needs to be ready to present an offer, which tells the Seller, they are serious and prepared financially.
Before the homebuyer begins searching; homes for sale in Massachusetts they need to be prepared with a pre-approval letter from their lender. Its important to note that a pre-approval letter is not the same as pre-qualification letter which you can usually get by providing some general financial information over the phone or through a lender website. On the other hand, the pre-approval letter comes with substantially greater lender review, including tax returns, W2′s, pay stubs, bank statements, 401k’s, IRA’s, and other investment accounts verification. The pre-approval letter tells the Seller that the Home Buyer is serious and prepared financially to make a deal. Just as important the homebuyer through such an extensive financial review is usually able to establish a good estimate on what monthly payments will be verses monthly cash flow. One thing to note is the use of the word “pre” in pre-approval, this mean not binding for the lender. The Lender will want to include an appraisal of the home along with current employment status, interest rate adjustments if any and current credit card balances prior to closing.
Also the homebuyers should present an offer that is competitive and not insulting to the Seller. Low-balling an offer, which is substantially below list price, will generally not work in a Sellers market. Actually in a Sellers market the homebuyer is likely to make concession to the Seller in an attempt to sweeten the offer. Some of these concessions may include a Sale Leaseback agreement, which essentially allows the homeowner to sell their property and then lease it back from the new buyers. Why you ask? This allows the Seller time to locate their next residence in an already tight Massachusetts real estate inventory market. You laugh but some potential homebuyers are so eager to purchase that home for sale in Weston MA that their offer includes waiving both financing and inspection contingencies, which are strongly, advise against. With new government guidelines and a tight credit market frequent delays and stricter underwriting could spell disaster for those tempted to waive a financial contingency; by doing so, the homebuyer places their escrow deposit at risk in the event financing falls through. Also waiving a home inspection lays the groundwork for potential costly repairs and other future nightmares. So don’t do it!
ABOUT THE AUTHOR: Roger Martin is a Massachusetts Realtor with Century 21 Commonwealth. Roger is a unique blend of both Realtor and licensed General Contractor with over 20 years of experience building Custom Homes , Renovation and Design. Serving the Ashland, Brookline, Chestnut Hill, Concord, Dover, Framingham, Lexington, Marlborough, Natick, Needham, Newton, Sherborn, Sudbury, Wayland, Wellesley, Westborough, Weston and surrounding areas.
If you have questions, comments or suggestions for future articles or have interested buying or selling a home, please feel free to contact Roger at (p) 1.617.365.4311 ; (email) firstname.lastname@example.org or (blog) www.realestateinmassachusetts.org