Jim the Realtor, a/k/a Jim Klinge, is known for his video chronicles of the Southern California housing bust. Now, as I report in this week’s issue of the magazine, his camera is capturing a different story: rising prices and bidding wars. Here are his tips for getting the best deals in today’s market:
Experience counts. Sellers “should pick an agent based on how many sales they have closed in the last 12 months,” he says. “That’s the best indicator of how they can navigate this market. You don’t have to be a superstar, but you need to know your way around and close at least one a month.”
Don’t get greedy. Klinge insists that the very best offers come right after a property is listed. “People are used to the Internet, Amazon, and buying what they want, when they want it,” he says. Potential buyers know about new listings instantly and want to buy quickly. He says some agents get “greedy” waiting for better offers after the first wave. In the meantime, potential buyers lose interest, find something else, or feel less pressure to raise their offers.
Be ready to modify your wish list. Klinge says the bidding wars are most intense for the best properties—houses in mint condition in desirable locations within the top school districts. If you want to avoid paying top dollar, be ready to sacrifice something—if you’re willing to take on some renovations, you’ll face less competition.
Be ready to buy. Sellers favor buyers who can offer larger down payments and are taking out conventional mortgages, which have fever hurdles than FHA loans. Buyers should have financing lined up and be preapproved for a loan before placing a bid. The fewer conditions a buyer tacks on, the more attractive the offer. And when you’re asked for your best and final offer, give just that: not less—and not more than you can afford.