Right when a new client of mine reaches out to me and asks how the market is, I tell them the ugly truth. It is tough out there for buyers. Tough doesn’t quite paint the picture… sometimes I use Game of Thrones references to get my point across. If after I let them know the current state of the market, they are still interested in pursuing homeownership, I know I got a fierce buyer on my hands. 😉
It doesn’t just take aspiration to buy a house right now; it takes guts, self-care, time, and persistence. It can be draining, so there are tactics that can make the process less painful for buyers. Here are a few of the tips I give to my buyers starting their journey, to ensure they come out of the gate strong, efficient, FIERCE and ultimately successful in less time.
- We set up a time to meet and go over the process before touring homes. This is where I tell buyers the state of the market, and the different negotiation tactics at our disposal, so that clients are 100% prepared before going to battle for a home.
- We need the approval from the lender IN HAND before we set up any searches, or see any homes in person.
- We set a time and day to go view as many homes as possible (6-10 is my preference). This way you have seen what is currently on the market, and you know what houses are being priced at in the different areas you are considering. I will also tell you what I believe the house is likely to actually sell for, since it is common for homes to sell over list price. When you have to escalate 10-30k above list to get your offer accepted, it can be more nerve wracking when you have not viewed enough properties to know what homes are being priced at, and ultimately selling for.
- Save, save, save! Having as much cash as you can helps in a variety of ways. Check out my post about why your offer isn’t being accepted (#2) for more details on this subject:
- Don’t invest too much emotional energy or time into a home until we are through the inspection, or better yet, the appraisal. Sellers can become unrealistic when they receive multiple offers in the beginning, and can become unreasonable and non-accommodating when things come up on inspections, or the appraisal comes in low. This could sadly end the transaction after being under contract 10+ days. Let’s not order the new kitchen floor tiling, or meet contractors at the house about the additional bathroom install, just yet. 😉
If you’re thinking of buying a home in the future, I am happy to help you prep way in advance. Shoot me a text, or pop me an email.
To read more about me, or to learn more about the process, check out my other blog posts, here.
1601 S Adams, Tacoma WA 98405
Square Footage: 1,280
4 bedrooms, 1 bath, with two bedrooms located on the main level, and two bedrooms upstairs
Offered for $299,950
Many updates to boast of in this centrally located home! Be close to it all, while having peace of mind that the main systems are good to go. There is a new electric panel, roof, heat pump, and water heater. French doors installed off of the kitchen, leading into the oasis of a backyard! New deck, and gravel patio, as well as a large garage out back. Great flow for entertaining. Seller expressed that some of her best memories here were hosting dinner parties on the deck in the summer.
Seller will miss walking to Cheney Stadium to catch a baseball game, and walking to the 6th avenue district, “We loved walking to Valhalla Coffee on 6th and Proctor, and frequented the restaurants of Primo Grill, Asado, and the Red Hot. Fred Meyers is just a hop, skip, and a jump away from groceries.”
The seller is a local artist, who originally picked this house to call home based on the location, “I was commuting to Seattle and wanted easy access to the freeways.” She also mentioned that the layout was ideal, “I liked the kitchen opening right into the dining room and the flat, easy to maintain yard.”
When I asked about some of the memories she has in this home, she mentioned 20 person dinner parties on the deck and patio in the summer, piano playing parties with wine tasting in the front room. She says she will especially miss the deck, garden, and workshop outback, and of course, the AC!
Watch the video, here!
Welcome to the 2018 Tacoma market, Buyers! In case you haven’t heard, let me catch you up to speed. It is a sellers market out there. What does that mean for you? Buyers have little to no power in this market, unless the house falls under one of these categories:
- It stinks (literally)… or figuratively
- It has been sitting on the market for over 20 days
- It’s over priced
- It has come back on the market after going pending, the seller is in a hurry, and miraculously, no one else is interested
- It’s got a funky layout, or is located on a dumpy street
- There was another cute house nearby with the same stats, listed lower with the same offer review date, and it distracted most of the competition
Sometimes, these scenarios still don’t matter.
That being said, in-general, buyers need to be strategic, and competitive while making offers. Typically, if priced right, and the proper preparation has gone into listing the home, houses are staying on market, available to the public for 4-5 days. That’s it.
If the house fits the equation for expectation of multiple offers (curb appeal, functional layout, clean, perhaps staged- but de-cluttered, and priced competitively), you should anticipate being in competition with 3-5+ other buyers.
I had a great conversation with a lender, and an escrow closer the other day, both telling me horror stories of clients not getting a home under contract even after making 10+ offers. Even in this market guys, something has to give. Have you had your agent in Tacoma make more than 5 offers on homes and were told yours just didn’t make the cut?
If you are making that many offers, there might be something else going on…
Reasons why your offer *might* not be getting accepted:
1.You’re not offering/escalating high enough.
Your agent can run comps (recently sold homes, within 1 mile or so from the subject property) and hopefully provide local insight in what homes like the one you want to offer on are typically going for. Of course if your agent says you need to go to x amount but you are not comfortable doing so, that is in your right, and you shouldn’t offer more than what it is worth to you. However, if this happens more than a couple of times, it may be time to re evaluate your offer amounts, or reduce the price range of homes you’re going for, so you can be more competitive.
2. You’re offering quite a lot over list price, but have little cash to back-up that offer amount.
What does this mean? Let’s say the house is listed for 250k and you are approved for 330k. You hear that there are other offers coming, and you say to your agent, “Go ahead and escalate to 330k, we really want this house!” The problem is, your agent runs the comps and sees that the chances of an appraiser confirming that it is worth that much (based on similar recently sold homes nearby) is slim to none. A savvy listing agent will tell their seller this, and if you don’t have a large downpayment, or a 22AD Appraisal Gap Addendum included in your offer, then just because your willing to offer (finance) that amount, doesn’t mean it is a reality for the seller(s). It’s okay to make an offer that is pushing it compared to the comps (pending listings nearby that haven’t closed yet might be closed by the time the appraiser goes out, giving them higher priced comparables to use in their value assessment), but going overboard without a 22AD likely won’t be taken seriously.
*An appraisal gap addendum is a pre determined amount of additional cash that you offer to bring in-the-event that the house appraises for less than you are willing to offer. For example, you offer 270k, and attach a 22AD addendum, agreeing to bring up to 10k extra cash if it appraises for less than your offer of 270k. Appraisal comes in at 265k, that means you bring 5k extra to close so that the seller doesn’t receive a lower profit from what you offered. If it appraises for lower than 10k, you have only agreed to cover 10k of the gap upfront.
3. The other terms of your offer are weak.
It is not uncommon for more than one offer to come in around the same amount, even with escalations with varying escalation increment amounts. If more than one offer lands on the same amount, the agent and their sellers are going to be analyzing the other terms. How strong is the earnest money? How long is the inspection period? When is the closing date? Who is the lender?
*Escalation Addendums are used to offer a base amount, and state that you will beat any competing offer by x amount, up to x amount. You set the max amount you’re willing to pay, without offering it flat out, right away.
4. Little details that make a difference…
–Did your agent reach out before submitting the offer to introduce themselves, and request information about what the seller is looking for (any special terms they’d like to see?), and find out how many other offers the agent may be expecting?
-Did you or your agent request that your lender reach out to the listing agent via phone call, text, or email to introduce themselves and express how qualified you are for this purchase?
-Did your agent let the listing agent know your offer was coming before submitting it?
-Did your agent take the time to attach your offer, and pre approval letter from your lender, to the offer submission email?
-Did your agent take the time to include a professional cover email summarizing the terms of your offer?
-Do you and your agent fully understand the details of your offer?
There are times where I can just tell a house is going to go way over list, or likely receive cash offers. I will explain this to my buyer(s) and check in with the agent to see if my suspicions are correct. Sometimes I ask a question as vague as, “Hey, out of your 6 offers you have received, is it safe to assume one or more are cash, and are above list?” If they say yes, that can save you precious time and energy you would spend going for that particular house, and let you set your sights on another! It’s always worth a shot to ask.
Not sure why a seller would prefer a cash offer to a financed one? Check out my blog post on that topic, Why Does a Seller Care If I’m Using Cash or a Loan to Buy Their House: http://keryn.withwre.com/2018/01/02/seller-care-im-using-cash-loan-buy-house
At a Glance:
Front House: 3812 S Thompson
4 Bedrooms, 2 Bathrooms
Sq Footage: 1,600
Currently Rented for: $1,490
Back House: 3810 S Thompson
3 Bedrooms, 1 Bathroom
Sq Footage: 1,200
Previously Rented For: $1,095
Two homes for the price of one, located in the heart of the Lincoln District! Front home is a spacious craftsman, with tall ceilings, large bedrooms, and an unfinished basement. The home in the back is also quite spacious, and has newer flooring. There is a private parking pad off of the alley for the back house, and a driveway for the front home.
Easily rent both out, or live in one, and rent out the other. Great property for families who would like to live close to one another.
The houses share a backyard, but are separated by a privacy fence, so that occupants can have privacy. It allows tenants or occupants with pets to let their dogs out, without disturbing those in the other house.
These homes are in the center of it all, in the Lincoln District. Travel right next door to Jubilee Burgers, or 2 blocks to Vien Dong, a local, family owned Vietnamese restaurant. One of the best Torta shops, El Zocalo, is one block further. If you are a sushi lover, Gari of Sushi is 2 minutes, the other direction. There are many grocery stores nearby as well, including Safeway, East Asia Market, and Hong Kong Market. All under a 5 min drive! The location is close to the freeway, so it makes commuting a breeze.
The Lincoln District has been undergoing a revitalization project. This project includes pedestrian, and infrastructure improvements. Read more about it, here.
Front home has tall ceilings, charming built-ins, and spacious rooms.
Front house is in much better condition, but the back home just needs your vision to make it home! Since it is not possible to build an ADU in Tacoma for the time being, this is great for the financially savvy buyer who wants to rent out a portion of their investment.
5401 S 11th Street, Tacoma WA 98465
At a Glance:
Square Footage: 1,625
4 Bedrooms, 2 Baths with 2 of the bedrooms located upstairs, two downstairs, and a bathroom on both floors.
Remodel in 2014 included fresh paint, new flooring, new appliances, new windows, and a new roof.
Large covered deck off of the living room, spacious backyard, one car garage, and outdoor shed.
Offered for $325,000
Location is key- live near the entertainment found on 6th Avenue, but be situated on a corner lot, on a quiet street. It’s the best of both worlds! Sellers frequently walked to Tacoma Boys, Cutters Point Coffee, and DeLong Park.
I chatted with the seller about some of the greatest things she appreciated about living here-
“The quiet mornings with the sliding door and windows open. Listening to the wind chimes and birds during the warm months, the sunny kitchen, the two decks, my lovely neighbors behind me, having the yard to play with the dog.”
Both sellers mentioned that they remember it immediately feeling like home when they walked in for the first time. When I asked about specific memories they have of living in the house, they both mentioned a party-
“We hosted a Great Gatsby themed birthday party for a friend that involved costumes, themed food and drink, a photo booth, and croquet outside. People were able to easily flow outside to enjoy the sun and inside to dance and eat.”
The layout is both functional for everyday living, and perfect for entertaining.
Newer appliances in the updated kitchen.There is a covered deck, right off of the living room. Seller expressed how she would miss having coffee out on the decks in the morning, or be out relaxing in the evening with a cocktail.
Pictured above are the two upstairs bedrooms and upstairs bathroom. If you are looking to have roommates, or family members live with you, the layout of this home lends itself well to that. People on each floor can have privacy, and separate bathrooms.
Coming in at around 7,000 square feet, the yard is quite spacious. There is an outdoor shed, one car garage, and plenty of street parking. It feels like a little slice of the PNW with all of the trees. It’s like you live in the wilderness, but are super close to all of the great things in the city.
There are times where it-is-clear that a seller has gone above and beyond to romance the buyers and the buyers agents of the world, and I find myself swept off of my feet. Here are ten details in my experience showing homes, that help create the BEST showing experiences possible for me and my buyers.
1. The house is vacant: there is no seller present, and if the house is owner occupied, you can barely tell! My buyers might say, “wow, is this how they live or is this staging?”
2. The house is beyond tidy, it is SPOTLESS. It feels like a group of trained professionals came in and really gave the place a quality, detailed cleaning. All of that dust and animal hair that accumulated on the baseboards, gone! If there is carpet that is not new, but in great condition, it has clearly been professionally cleaned. The interior paint looks fresh, or relatively new, and the floors are sparkling. Elaborating on cleaning more (yes, I may place a high value on order and cleanliness myself), let’s focus on details. Bathroom grime- get rid of it! Caulking needed around the tub? Handle it! We will notice those details; or at least, the people willing to pay more for those details being handled, will notice.
3. The lights were left on, and it was clear it was intentional for the showing. All-of-the doors are open, so you don’t have to wonder what is behind any of them. Maybe the basement door is shut, but if it’s in an obscure spot, it is labeled.
4. If it is winter, the heat is on, so me and the buyers are not freezing while we are admiring the house. Warm houses make showings feel less rushed, and we tend to take our time looking through the house. Subconsciously when we enter a home that is warm and clean, we get feelings of comfort and associate that with the home itself!
5. There’s light music left on in the background. This can be tricky to execute properly, but when the music is perfectly in tune with the vibe of the house, it definitely adds to the showing experience.
6. There’s a mat to wipe your feet when you walk in. Buyers usually don’t have issues taking their shows off in a house that is inviting, warm, and clean. If you leave a mat to wipe our feet, that is extremely helpful! Especially by doors leading to the yard.
7. There are one or two keys that open every door, and those two keys also open any outbuildings. It is a pain when there are 4+ keys, even if they are labeled… but if you must have 4+ keys, please make sure they are labeled!
8. When a seller leaves bottles of water, chocolates, or another type of thank you for viewing the home. Especially if they have done all-of-the above. This is super classy and one of the least common things I see, even at great showings.
9. It isn’t a pain to get into the house. This one isn’t super romantic, but I am telling you, it makes a difference when it takes 5+ minutes to figure out the “trick” to getting the front door open. Don’t make frustration be the first emotion the buyers or their agent feel when trying to view your home. If you know the door is tricky, fix it prior to having it available for showings. Make it easy and painless to show your home.
10. The sellers agent follows up asking for feedback. They do this via text or email, within the first two days after the showing occurs, and they provide an image of the home, not just the address. Buyers agents show many homes, so providing an image of the house so the agent doesn’t have to look it up is extra helpful and makes giving feedback easier! The sellers agent thanks the buyers agent for showing the home, even if their buyer isn’t interested in placing an offer. That same buyers agent probably has other buyers they could show it to. Keep it professional and friendly! The goal is to get more showings, after all.
Presenting your home like it is a high end, quality product (yes, even in the 200k-300k range where it is even easier to stand out!), where even the smallest of details have been paid attention to, will make a significant difference in the quality of offers you will attract. Do the work upfront sellers, and you will see the results.
Read my post about how to not creep buyers out during showings, here
I have been on more house tours than I can count at this point. Recently I have been showing a ton of houses, and I have experienced good and bad viewings with my buyers.
The vibe of the house can be just as important as the house itself. How comfortable the showing is can be the difference between a buyer making an offer, or putting the house on the back burner. I have had showings where the house was super cute, but my buyer couldn’t shake the off feeling they had while we were there, and it made the buyer go with the house that showed better. Sometimes a showing doesn’t have to be outright bad, but less good than another to lead to the buyer picking one house over the other.
So what should sellers do to create the best viewing experience possible? I will save the gold standard showing tips for another post. Let’s start with the basics, shall we?
1.Leave for showings!
Leave 10-15 min prior to the time of the showing.
This is best case scenario. If the buyer shows up early, before the agent gets there, it is good for them to pull up to an empty driveway and really get a sense of what it would be like to own the house. Seeing a car in the driveway can worry the buyer that you are not leaving for the showing, or that somehow the days/times got mixed up. Many buyers feel awkward interacting with sellers when they are showing up to look through the house. Make it stress free and be gone for the showing! Take your cars with you if possible so it is clear you are gone.
2. Either turn on all-of-the lights, or leave them all off. It is unsettling when you show up to a half dark house. Is someone here? It’s vacant, so why are the rooms upstairs lit? It’s owner occupied but we have an appointment; are one of the owners in that solely lit room in the back of the house? Don’t make us wonder if someone is home! All the lights turned on is a good indication that it was set up like that for the showing. If you only want to leave a few lights on, have them make sense. Perhaps leaving the entry light, and living room light on, and the bedroom lights all off.
3. If the house is vacant, don’t leave random belongings or trash lying around. If there is a random pile of trash in the corner of a room, a pile of pillows and blankets in the middle of the floor, or stacked mattresses with a sheet messily thrown on top in an otherwise empty house… this gives the house an exorcism of Emily Rose vibe. Just get it out! This includes seemingly harmless belongings such as a random chair (staging or ghost chair), leftovers on the stove that didn’t make it into the trash (is someone squatting in this vacant-ish house?), random knickknacks, and toys. These items can be distracting, or put a buyer or their agent on edge that someone may actually be in the house…
4. Clean the house you are trying to sell. Cleaning goes such a long way. If you can deep clean, that is the gold standard for having the best viewing experience. At the very least, making the house not disgusting (trash, scum, dirty floors, etc) is the bare-minimum for not creeping anyone out. This includes not leaving your undergarments lying around, and keeping the space generally tidy if you are still living there.
5. Make special notes on the showing instructions when needed. Listing agents, if it is your first day on the market, and the sellers are going to be there cleaning, moving stuff out, etc, make a note of it on the showing instructions! Save the buyers agent and their client an awkward, “Hi can we show your house,” conversation. Especially if the sellers don’t seem to realize their house is actively on the market… yikes! If there is a contractor doing work at the house, please make a note so we are not startled when we find someone in the basement.
I am putting out these tips not just to accomplish decent showings for buyers, but to create a feeling of safety and comfort for us agents too! We all have stories about weird, creepy things happening while showing houses. Please help us not be reminded of those times, or worry we are about to add another story to our list!
The seller is not working with the lender directly, so why do they care who I use? This is a great question that I get frequently while talking about strategy in multiple offer situations. Sometimes it isn’t on the listing agent or sellers radar who you are using, but there are instances where a savvier agent may let their sellers know that it does matter who your lender is, especially if the seller has more than one offer to choose from. Here are some of the main reasons a seller might care who your lender is:
- If the lender is local and has a great reputation in the community, this could provide more peace of mind for the seller(s) and their agent. Knowing that the lender is reputable, used by many buyers in the community (knowing their reputation is at stake, since they rely on local referrals and their reputation), and will follow-through with their part of the transaction, is huge. An offer submitted using a lender that might not have that added trust and track record, might be enough to set the offer using the local lender apart, just enough to be the preferred offer.
- If the lender has negative reviews, or is hard to reach and communicate with, this sets off a warning bell for the listing agent, which they will likely make their sellers aware of it. Listing agents should be calling lenders while reviewing multiple offers, to check on the buyers loan approval status, while also allowing them to get a sense of the lender’s communicativeness and professionalism.
- Do they get paid when the transaction closes, like we agents do? Many local mortgage brokers get paid on commission, not salary. While not always the case, I have noticed that lenders who focus only on home loans, and who are paid on commission, not salaries, tend to hustle harder for their clients and provide much better customer service.
- So how do you choose your lender? When talking to lenders and weighing who you will use, here are some questions to ask:
- Is the lender available on weekends and after traditional business hours to get you and your agent a pre-approval letter?
- Is the lender willing to call or email the listing agent after your agent submits an offer on your behalf? This is not required, but instills confidence in the seller and their agent, that the lender is easy to reach, is professional, and will work hard to keep their end of the transaction on track.
- Do you like and trust them? If you have three competent lenders going into your decision, go with who you like and trust. This person is going to be working closely with you and your personal financial information. It is important that you trust, and like them!
Check out my blog post about why a seller might care what type of loan you use, here
Why does my loan type matter to a seller? Loan types you typically see are Conventional, FHA, and VA. Each have their own set of benefits for buyers, but why does a seller care what type of loan a buyer is using?
- One of the main reasons a seller might favor one offer over another due to financing type, again comes down to the cost to a seller, and risk assessment of the transaction falling apart down the road. Some loans have a slightly higher fee that the seller is required to pay at closing, while others have no fee due from the seller. When two offers are close in offer amount, a seller might choose one offer over another based on the tiniest of details.
- Some loans have stricter qualifications on the condition of the home. This goes back to the appraisal and work orders. A Conventional loan typically is the least strict on condition, out of the financing options listed above. It is possible to have work orders come back on a house being purchased using a Conventional loan.
- Some loans require little to no money down. Why does a seller care how much you’re putting down? Typically a buyer putting a higher amount of money down looks more solid to a seller, meaning it is less likely their financing will fall apart towards the end of a transaction, causing the deal to die. Another reason a larger down payment looks attractive to a seller is typically sellers want to negotiate items that the buyers request them to fix after they have an inspection. Usually the goal for the sellers is to fix the least amount of items possible. If there are terms of an offer that indicate that the buyers might not have a ton of cash on hand (such as little to no down payment, or if they are using down payment assistance), the seller might worry about the buyer asking for more fixes on the inspection, or asking for a credit towards their closing costs to help them make fixes themselves after close. In summary, more cash can signal higher likelihood that the buyer(s) can handle fixes, and fees on their own, without asking for help from the seller(s).
When you have many offers all coming in around the same value, you get into weighing more of the gritty details like loan type, earnest money and down payment amount, closing date, inspection time, to the tiniest of details, more heavily.
As a buyer, your agent communicating with the listing agent prior to writing and submitting the offer to find out what terms the seller is looking for specifically can be enough to win you the house in multiple offer situations. If there are no other offers at first, and then other offers come in after you’ve submitted yours, your agent should follow up with the agent representing the seller and ask if there is anything you can do to sweeten the offer.
For more information about financing a home purchase, check out my blog post, Why Does a Seller Care If I’m Using Cash or a Loan to Buy Their House?
When I first sit down with people to help them understand the home-buying process, prepping them for the journey ahead, one of the topics I dive into is why a seller cares where the funds to buy the home are coming from. In the end they get paid the same, regardless of where it comes from, right?
A seller does care how you are purchasing their home, whether it be with cash, or by using a loan. It all comes down to risk assessment for them. The seller is weighing how likely the deal will survive. From the point of accepting your offer, making it through the inspection negotiations, getting passed the appraisal, to arriving to closing day, their payday. These are some of the factors they consider while reviewing your offer, especially if they are comparing your offer to other offers that around the same offer amount:
- Why do sellers prefer cash to loans?
- Cash offers don’t require an appraisal. Although including an addendum that makes the deal contingent upon a successful appraisal is still an option with cash offers. No appraisal means there is no risk of it appraising low (bank saying it is worth less than you’re offering), resulting in the bank not loaning the original amount to the buyers, which was offered to the sellers. In this event, the deal dies, the buyer brings more cash to close, or the buyer backs out and gets their earnest money refunded to them. A low appraisal is seen as a risk to the sellers, so not having to worry about that is generally appealing.
- No appraisal means, no work orders. Work orders are fixes required by the appraiser prior-to approving the appraised amount. It is possible to have work orders required, in-addition-to an appraisal coming in low. For example, you might offer 350k for a house, have it appraise for 325k, providing the seller install hand rails along the stairs out-front, and touch up paint on the exterior in the specified areas where it is chipping. Those are small work orders, but sometimes they require much larger, more expensive fixes, such as installing a new roof. Not having to stress about this process as a seller gives them one less thing to worry about and looks great in a competitive situation.
- Speedy close! Typically, you can close on a house with a cash offer in 1-2 weeks, depending on where the funds are located. This timeframe is half of the time it takes to close on a house with a buyer using a loan. Lenders typically ask for 30-45 days to close on a home using traditional financing. This varies depending on where you are at in the loan process and what type of financing you are using! Depending on the sellers situation, perhaps they don’t need a quick close, giving cash offers a little less of a competitive edge. Your agent should be reaching out to the listing agent (sellers representative) before writing/submitting your offer to make sure they are up to speed on what the sellers unique situation is, and what they are looking for.
- Less picky on inspection? Many of us working in Real Estate would argue this is not always the case, but if someone has the cash to buy a home outright, there is an idea that perhaps they will be less picky during the inspection negotiations. One of the arguments agents can make on behalf of their home buyers using traditional loans is, they don’t have the money to make the repairs. A seller might make the assumption that a person using cash has the funds to not be as picky about some of the smaller fixes needed that may come up on inspection.
Many people in the industry tout the phrase, cash is king! However, depending on what the seller is looking for, there are other ways you can make your offer more competitive, if you are using a loan. Do the sellers want a rent-back? Are they waiting for a job transfer and prefer a long close over a fast one?
Don’t despair if you get beat out by someone paying with cash. There are always more houses coming onto the market!