What's the deal?

Posted by Barron Johnson on Thursday, January 2nd, 2014 at 2:23pm.

Home buyers, both first time, and the more experienced, are in for a bit of a ride when it comes to landing a deal and closing on a home.  The supply is short, inadequate would be a better description, and the demand is feverish at times. In certain neighborhoods, properties are sold on day 1 of the listing hitting the market, if not before.

I used the term "landing a deal" because I wanted to touch on the subjectivity of the idea.  Deal, to most people, is more than just a colloquialism for transaction or agreed exchange.  Everyone wants to get a deal, or the deal.  The buyer wants a good deal, the seller wants a good deal.  When supply is short, and you have 30 people all looking for the same scope of property in a given sub-market (a neighborhood or zip code), properties see multiple offers in the first few days, and the strongest offer wins.  The strongest offer doesn't have to be the highest, but it will usually be all cash or 25%+ down payment.  These offers are often 1-5% above list price, and this week I've seen properties with 5-6 offers submitted within a 24 hour window of the property hitting the market.  Fun for the seller, not so fun for the rest of the interested parties.

In these situations, the deal  becomes the opportunity to buy the house that is right for you.  With today's low interest rates, a $1000 increase or decrease in offer price translates to a $5 difference in monthly mortgage payment. In a buyer's market, the buyer has more power to negotiate discounts and concessions; It's unmistakeably a seller's market in Texas.

Good luck out there.

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