Buying a Home on a Fast Timeline

Real estate experts often refer to the impact and strategies of motivated sellers, but the needs of another group are sometimes overlooked: motivated buyers. Home buyers can have many motivations for wanting to buy quickly: a desire to take advantage of low interest rates, the need to address their housing situation before starting a new job or school, or to prepare for the arrival of a new family member. Whatever your individual reason, smart planning is the trick if youre in the position of buying on a tight schedule.

Establish Your Short List of Priority Features

 Every buyer has some vision of what they want in their next home. Buyers form a list (literal or subconscious) of the required elements and desired features that comprise their ideal house. Some items on that list may be seen as crucial; such as the number of bedrooms or size of the backyard. Other elements of that vision may be less essential but still highly sought after; such as hardwood floors or a two-car garage.

Every home buying adventure requires the buyer to weight the items on that list against each other. If youre trying to buy fast, identifying the most core home requirements is absolutely vital. Adaptability is the name of the game when you dont have the luxury of comparing months and months of homes on the market.

Before you ever start the housing hunt, write out a list of features you need and want in a home. Next, rank them from most important to least important. You may even want to separate them into two categories: necessities and wants. The least critical items on your list (particularly if in a wants/desires category) should be those on which you are most willing to compromise.

Log Some Time Online

There is no substitute for touring homes in-person or getting to know neighborhoods firsthand (either on your own or with agent guidance). Yet home showings are typically limited to reasonable hours (no one wants to host buyers at midnight), and face-to-face visits can be time consuming. If you are on a short timeline, prolonged in-person home tours should be reserved for only those homes most likely to meet your needs.

Online home searches are the perfect way to fast-track the home search process. The easy-to use property search tools on the website allow you to browse through thousands of homes, filtering by core home elements such as price and number of bedrooms/bathrooms as well as detailed home features in the advanced criteria. Searching within the Google map view allows you to quickly compare the available homes on the market in different neighborhoods and areas.

 For individual listings, online photo galleries and virtual tours (when available) give you a peek inside each property from the comfort of your own home. Registering for a free account gives you the ability to save individual favorites (which can then be organized and rated) or entire property searches. Email updates allow you to stay up to date on individual properties or particular saved searches. Many of these search tools are also now available on your web-enabled mobile device, allowing you to find and save homes while on the go.

Using the web to efficiently search will save time and more effectively narrow down your options. Online tools also offer night owls and early birds a great way to advance their home buying strategy while competing buyers sleep!

Get Pre-Approved for a Home Loan

Even highly motivated buyers should still make sure to secure financing before plunging headfirst into the house hunting stage. Obtaining loan preapproval gives you the flexibility to make a qualified offer as soon as you find a home in which youre interested. While you can shop for home loans after finding a desired home, many sellers wont take buyers seriously if they dont have preapproval in hand. In fast moving markets, waiting a day or two for preapproval can put you at risk of losing the home to (or entering a bidding war with) a more qualified buyer.

The preapproval process involves the lender verifying your income, assets, debts, and credit history before issuing you a letter stating that you are approved for a mortgage up to a specific amount within a certain timeframe. Remember that prequalification and preapproval are not synonymous. Prequalification can serve as a good indication to sellers of your overall creditworthiness, but is nonbinding to the lender.

In addition to making you more attractive to sellers, having preapproval further helps you establish your price range (because the maximum approved amount is stated in the letter) and saves you time at closing (the lender will have already completed the necessary qualifying and underwriting steps).

Try to Find Motivated Sellers

Receptive sellers are always a buyers best friend, but are even more so when the buyer also wants to streamline the transaction. Ways to look for motivated sellers:

Price reductions: In some cases, price reductions may simply indicate misjudgments made in the original pricing of the home relative to the market conditions. But sellers who reduce the listing price once or multiple times may be looking to attract buyers in a hurry and speed the sale along.

By the same token, a home with an original asking price that is below the market for comparable homes may indicate the sellers desire to unload their property sooner rather than later.

Vacant homes: If a property is vacant, there is a good chance that the seller is currently carrying both the listed homes mortgage as well as one on their new home. At the very least, they may be paying rent at their current residence on top of the listed mortgage. Sellers in either situation are more likely to be motivated to sell quickly and with fewer concessions. Also working to your benefit is the fact that vacant homes translate to a faster move-in.

Stagnant Listings: Check for homes that have been on the market for six months or more (or listings whose days on market number is far higher than for comparable homes). The sellers of these homes may be more inclined to sell with a somewhat quicker negotiating and closing process.

Other upgrades offered by sellers include allowances for kitchen facelifts, bathroom remodels and new landscaping.

The Dangers of an Unreasonable Asking Price

One of the most common and costly mistakes made by sellers is setting an unrealistically high asking price. Every seller wants to receive the highest closing price possible for their house, but losing sight of fair market value can have serious repercussions.

In some cases a lack of objectivity results in overpricing the home, other sellers may subscribe to the theory that pricing high initially leaves room to negotiate lower later. Overpricing from the outset could actually force you to end up settling for a lower price than you would have received by setting a realistic asking price based on market research.

Common Results of Overpricing

Fewer "Eyes" on Your Listing - Mispricing your home can prevent it from ever being seen by a certain percentage of potential buyers who might otherwise be interested in your home. Savvy buyers today research the local market even before acquiring an agent. Buyers will search available listings both online and offline in real estate publications, and in most cases they will set a price range to limit the listings they review. If your home is outside of their range even by a few thousand dollars, it may not be on the buyer's radar.

Most buyers will then hire a specialized buyer's agent, and together they will develop a strategy to evaluate homes that match the buyer's needs within their acceptable price range. Occasionally an agent will provide information on a home above the buyer's maximum price point, but rarely will they stray too far above that boundary.

Lack of Showings - Agents who work with homebuyers will know local market conditions and the listing prices of comparable homes. If they feel your home is overpriced, they will be reluctant to show your home to their clients for fear of wasting their time.

   Helping Competing Listings - It may not be your first thought, but overpricing for your home for the market can actually help the competition. Your home's higher asking price will make other nearby homes of equivalent size and quality look steals in comparison. Astute selling agents for other properties will use the price gap between your home and their own a further selling point of their listings.

Stagnation and Stigmatization - If your home is priced higher than what buyers in your market are willing to pay, it runs the risk of sitting on the market for a longer period. The longer your home sits on the market, the more likely it will become stigmatized as "overpriced" in the real estate community. Once that happens, removing the stigma and restoring interest in your home can be a difficult task. Even dropping the price later will not have the same level of impact as the initial, negative, impression of your listing.

Tough Negotiations - A high listing price can be a warning flag for buyers that they use for leverage during the negotiation process. If the asking price seems high without home improvements or features to warrant the difference, buyers may assume that you are either A) not well informed about the market, B) not a highly motivated seller, C) have a need for money (perhaps forced by a move to a higher-priced area), or D) are simply creating some bargaining room. If the buyer believes any of these, they are likely to fish to determine how low of a price you will accept.

On the other hand, if your home has languished on the market as a result of a high price, buyers may believe you are becoming desperate. Interested buyers will make lower offers as a result.

Appraisal Problems - Should you be fortunate enough to find a motivated buyer willing to pay your overestimated asking price, you still run the risk of having the deal fall apart prior to closing. Most buyers will use some kind of financing to pay for their home purchase, and every lender requires an appraisal of your home's value.

The appraiser will review your home in person to assess its value based on similar homes that have sold (usually within the last six months). If the appraised value is below the agreed selling price, the lender wills only approve a loan for the lower amount. You may be forced to reduce the selling price or risk having the deal collapse, and your home return to the open market.

Overpricing and Today's Market

Today the tendency to overprice relative to the current market can be even more tempting. Home prices have dropped since the high peaks in the summer of 2006, and as a result many are in denial about the current market value of their home. Homeowners who bought within the past five or six years in particularly may be overly influenced by the purchase price they paid during the real estate boom.

This comes at time when overpricing couldn't be a worse strategy. There is a smaller pool of highly motivated buyers, and today's buyers tend to be well educated about the market. Without the assumption of price appreciation, few buyers are willing to gamble and overpay for a home. In addition, credit tightening has reduced both the number of buyers who can qualify for a mortgage as well as the size of the mortgages available.

Creating a Pricing Plan

When pricing your home, the best strategy is to remain objective and compare your home closely to similar properties on the market. Take the opportunity to visit open houses and pay attention to recent sales in your area. Are you more focused on selling quickly, or on receiving the highest possible selling price? Is the price you have in mind reasonable when compared with what other homes are asking for and selling for?

Priced Too High: Corrections

If your home has been sitting on the market with few offers or showings to its name, consider whether or not it is priced correctly. Review recent sales of comparable listings, especially those that have sold since your home went on the market. Another method is to ask agents who have shown your property for feedback they received from their clients. Have buyers who looked at your home in person purchase other homes in the area instead?

Acting quickly to adjust the asking price is the best way to keep as much of your marketing momentum as possible. Depending on how long your listing has been on the market, additional marketing may be needed to help repair some of the "damage" done to the reputation of your home's listing at the higher price. In some cases, you may be forced to slightly under price your listing to create additional interest.