It seems today's home buyers are feeling a very strong sense of urgency in the greater Seattle area. With the 30-year fixed-rate mortgage expected to rise to above 4 percent some time this year, and home prices rising, Buyers are wanting to get into something now to take advantage of the lower rates and prices. The only problem with this plan is that with our extremely limited inventory it is causing quite the frenzy and crazy bidding wars! Buyers are feeling the stress of potentially getting priced out of the market as it seems home prices are rising weekly right now!
I'm experiencing this first-hand in the entire Seattle metro area in pretty much all but the highest price points. Some agents are recommending very large earnest money deposits ($50,000+) and waiving all contingencies, including financing. I can't in good faith support this practice, especially if the buyer is indeed planning to finance the purchase. It is just too risky, and with how rapidly our prices seem to be increasing there is a high likelihood that the appraisal on the home (selling for substantially over the asking price) will not come back high enough to justify this price. This would mean the Buyer may need to bring in cash to make up the difference, or risk losing both the home and their earnest money since their loan will not be approved with the low appraisal. There are other ways to make your offer strong and to give a Seller good reason to accept your offer that includes a financing contingency. If you are needing to obtain a loan to purchase a home, you should really never waive the financing contingency. There is no reason to if your agent is familiar with how the standard NWMLS financing contingency works and can explain to a Seller how it can benefit them as well.
Every transaction and offer I have been involved with this year has been a multiple offer situation, even when you're the very first buyer (submitting an offer within 30 min. of the home being listed in the MLS), it seems you will likely still be dealing with competition. Please make sure you've got an agent that knows all the ins and outs of how to best structure your offer to make it as strong as possible but still keep you protected. And if you're a home seller, please make sure your agent knows exactly what is happening in your local market week-to-week and is experienced in dealing with these multiple offer situations. It's really not the kind of market you want to hire a rookie or part-time agent in, regardless of whether you're buying or selling.
To all the people in the greater Seattle area trying to purchase a home right now....Hang in there! It is a tough market and it's easy to feel discouraged or beaten up, but the right home is out there for you! It might just take a little longer than you originally expected!
And to all the homeowners who have been considering selling - We have not seen a better time to sell since prices began to fall in 2007, and we have never seen such a discrepancy in supply and demand! You may be very surprised at how much your home may sell for in today's market in just a few days! I'm happy to provide a free, no-obligation market analysis to anyone who's curious.
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