real estate

This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013. Please submit follow-up questions in the comments section or via email.

Question: We are planning to buy a home in 2014 and are a little anxious about how much of a seller’s market it will be. Can you share some strategies that have worked well for you in a seller’s market? 

Every situation includes a unique combination of needs, wants and personalities. That said, I’ll share three tips you may want to employ during your home search and negotiations.

1) It’s not just about the money. Unlike what they show on TV, each offer includes a multitude of criteria in addition to price. I try to find out as much as possible about the sellers’ situation before making recommendations to my clients.  For example, I want to know why they are selling and when they prefer to move out. I ask about any specific concerns they have about the sale.

Let’s say the sellers are still trying to find a new home for themselves. In this case, we may offer to close in 30 days so they have access to their proceeds, but allow the sellers to rent back the home for specific period of time so they have breathing room to complete their purchase and move out of their current home. If the competition is steep enough, we may offer to let them rent back for free.

Maybe they are weary about the home appraising. In this case, we can consider waiving the appraisal contingency if this is an option or working with the lender to cut the appraisal contingency period down from a few weeks to a few days. I can tell you from experience that working with the right lender is priceless in these situations.

There are literally hundreds of examples I can provide, but the point is that you want to consider more than just price when making your offer, especially when competing with other buyers. You’re welcome to read an article I wrote about the various ways you can make your offer more competitive.

2) Act quickly. I tell my clients from day one that we will take as long as they need in order to find the right home, but I want them to be in a position to move quickly once they find that home. Regardless of the market, another interested buyer can completely change the dynamics of your negotiations.  You can save you thousands of dollars by wrapping up a contract before another buyer comes along.

Not every seller is going to be willing to accept an offer before they go on the market or within the first couple days of being on the market, but others are happy to do so if the terms you present are agreeable to them.

Make sure you have a solid pre-approval letter from local lender (or proof of funds if you plan to pay cash), funds available for your earnest money deposit and an agent that can work quickly on your behalf. I stress *local* lender because a savvy listing agent is going to educate their client about the issues that often arise from working with online lenders, out of state lenders and even some of the bigger banks.

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This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013. Please submit follow-up questions in the comments section or via email.

Question: It has been a while since I purchased a home and I would like to get your advice on the various pitfalls a homebuyer should be careful to avoid. 

There are hundreds if not thousands of potential pitfalls to avoid when purchasing a home.  These are the five pitfalls that are top of mind:

1) Choose a local lender — Nothing spoils the home buying experience more often than a non-local lender and I’ve seen way too many people learn this the hard way. I beg you not to dial a toll free number or even one of your friends in the mortgage business if they are not based in the D.C. area.

The mortgage process can be daunting no matter who you work with, but exponentially so when you are using someone unfamiliar with the local contract, closing costs and closing process.

If the lender is on the other end of a toll free number, they have no vested interest in earning your long term business. They are definitely not going to pick up the phone after hours when you have an urgent question or need a custom pre-approval letter in a hurry. They may even hurt your chances if a seller is picking between competing buyers, because too many listing agents have been burned by the non-local lenders who fails to meet the closing date, let alone the financial contingency deadline.

If you find a better interest rate elsewhere, you are far better off using it to negotiate a lower rate with a local lender than going with the out-of-town guy.

2) Avoid wasting time on Trulia, Zillow, etc — I can’t tell you how many emails I receive from clients that think they found a gem on one of the aforementioned websites, only to find out that it sold months ago. The best source for 99.9% of the listings out there is the MLS.  Our local MLS is called MRIS and they have a public website that you can use MRISHomes.com. I should also mention that ArbourRealty.com pulls listing directly from MRIS so the information is always current.

We offer our clients custom MLS alerts that let you know the moment new listings hits the market that match your criteria. It saves you time from having to search the thousands of various real estate websites and provides you with access to the same information that Realtors have.

3) Buy for the long haul — If the downturn in the real estate market has taught us anything it is that we cannot always assume our home is going to be worth more than we paid for it. If you think that you will want/need to sell in less than five years, then renting is probably the better option. It is certainly the safer option.

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