Looking to buy a house in or around Charlottesville? Get ready: “This real estate market is a perfect storm,” says Sasha Tripp, owner of Story House Real Estate.
The local area has always been an attractive real estate market, even with relatively high prices and limited inventory. Now, with rock-bottom interest rates and pent-up demand after the COVID-19 shutdown, properties sell in days rather than weeks—and multiple offers well over asking price are common.
Add to the mix two pandemic-spurred trends—working remotely, and getting out of large urban areas—and the pressure is on. Some realtors estimate that buyers coming from large urban areas have increased 10 to 15 percent. Loring Woodriff, whose real estate firm concentrates on upper-end properties, says, “I’ve seen the amount of people coming here from large urban areas—New York City, Atlanta, California, even northern Virginia—double.” And buyers from high-price markets often arrive with deep pockets and cash offers.
So, a wonderful time to sell. But if you’re a buyer, how do you navigate this perfect storm? Preparation is key.
Get your financing lined up. This includes pre-approval for a mortgage, and possibly for a bridge loan, since an offer contingent on the sale of your current home may not be accepted. Jim Duncan, associate broker and partner at Nest Realty Group, says 35 to 40 percent of his firm’s clients are making cash offers. But even for buyers offering cash, Woodriff says having verification of funds is a smart tactic.
Get your current home ready. This means necessary repairs or cosmetic improvements complete, staging done, photos taken, and price set. In this market, you may hope your place will sell quickly, but being flexible on the move-in date can make your offer more attractive.
Know what you’re looking for. With properties moving so quickly, make sure you’ve already worked out what’s essential (e.g., neighborhood, distance from workplace, school district) and what isn’t. “Holding out for the perfect home is not realistic in any market,” says Duncan. “Every buyer compromises in some way.”
Know what you can live with. Just like sales contingencies, contingencies on inspection are going by the board. You may want to offer inspection for information only; another option, Woodriff notes, is to bring your inspector to the showing. Consider what kind of repairs you’re willing to handle yourself in order to get your offer accepted.
Most important, have the right partner. This is not the time to scan the Internet or drive around looking for For Sale signs. Tripp’s advice: Make sure you’re working with a buyer’s agent who will be out there—attending HOA meetings, talking with contractors and landscapers, scanning social media—to find properties coming on the market and get you in early. Repeatedly finding out that a house you like has already gotten multiple offers (or is already under contract) can be “exhausting, even deflating,” says Woodriff. “Lots of buyers end up putting their search on hold.”
Many buyers, in fact, decide that this market is too hot for them. If you’re only buying and don’t have to be in the market, Tripp says, “I’m candid—this may not be your time.” But she and other realtors say with preparation, patience, and the right partners, this can be the right time to buy. With interest rates this low, paying 5 or even 10 percent more could be a smart financial decision over time.
“Buying a home is a huge financial investment,” says Duncan, “but there’s also a huge emotional involvement. It helps to have a non-involved person helping you make this life decision.”
A word about letters
Buyers’ latest tactic to gain advantage in this hot market is to include a personal letter in their offer. Sending these “love letters” to sellers ramped up in spring 2020 during “contact-free” home-buying, as a way to put the human factor back into the transaction. Many realtors, however, are concerned these letters, depending on content, could lead to discriminatory decisions and thus violate fair housing laws. The National Association of Realtors discourages love letters; Tripp cautions buyers who insist on sending one to focus on “describing their interest in buying the home,” rather than including personal information that could be seen as fostering discrimination.