What you should do as a buyer in an overheated real estate market

Don’t be discouraged after a failed bid. The market today is overheated almost nationwide.

It's particularly hard if you're trying to place your children in a new school. Here’s what we would do and have done next: Continue looking in person by searching the neighborhood you are seeking until school starts, then if no luck, move to that neighborhood's school district in a month to month furnished extended stay hotel and put everything you intend to move in storage with the moving company you intend to use. It’s not as expensive as you may imagine to store your belonging this way. Then continue looking until you find your new home, be picky, and find your perfect home and settle on a closing date. Then pull everything out of storage when you have closed on your new home. 

This approach will take a great deal of pressure off and help you avoid making a hasty, costly and possible regrettable decision now. This is a major purchase and God has something in mind for you that has not yet been revealed. Be patient until He makes His will clear. 

But here’s an added incentive to follow this advice. The most active time in real estate is always between the end of the school year and the start of the new school year. Parents want to have a smooth transition for their children without breaking up the regular school year for them. You are now competing with those families who MUST find a place in the specific school district they have chosen and will overpay accordingly. Also there are lot of speculators out there who know this is currently a very hot market and are placing their bets with a quick turn around sale to these families in need. But don't panic!

After the school year starts around Labor Day, traditionally the market slows down dramatically with the slowest and deadliest time of the year in the industry being the upcoming end of year holidays when no one in the market is making a purchase or moving. 

We bought our current home during this time period while living in an extended stay apartment for about a year with our then three little children in December of 1990 with a 12/31/90 deadline to close. We were ready. The seller needed to close by the end of the year for a tax write off. We were glad to help him with a significant below fair market offer at an auction. We had no real competition due to his 10% required deposit and less than one month to close. Other buyers were afraid they would lose their deposit. We were not. Patience has it rewards. 

After January 1 the market will pick up again and will begin heating up after tax day on April 15 when parents want to get a jump start on their competition before the whole cycle starts over. Be patient. If you have nothing before this upcoming Labor Day, know that you still have options and are entering the best time of the remaining part of the year to be a buyer. Remember homes are listed year round!

You may get lucky and find a seller who is recently divorced, a widower who needs to downsize, or someone who just got a promotion in another city or just lost their job and must sell as quickly as possible. Also don’t underestimate the greed of heirs who are selling their parents home to inherit their money as quickly as possible. People die all the time as they say and I personally love estate sales! In each of these cases you will most likely find something much better than what you lost bidding on already. 

And remember, “he who has the gold makes the rules.” In normal times an offer is usually 10% below the asking price with the final price being 5% below asking, sort of like buying a car. Right now there is a tremendous pent up demand because of the pandemic which halted all sales. This, along with low interest rates, are driving today's heated market but it won’t last much longer. Good luck. I will be praying for you to find that perfect home.