- The Washington Times - Friday, October 27, 2000

There's a bidding war out there. Not only are houses in demand, but there aren't enough of them to meet that demand. Buyers must be prepared to bid once, twice or even three or more times on hot properties before realizing their goal of homeownership.

"There are too many people out there wanting to buy houses, and we just don't have enough inventory," says Bob Shields, an agent with Long & Foster's Annandale office. "It's a seller's market right now."

In Virginia, Maryland and the District, the housing market is booming. Sellers are putting their properties on the market and, within a few hours, getting numerous contracts from buyers. To be successful, a buyer not only must be ready to sign on the dotted line within minutes of viewing a home, but also must understand the contractual process and guard every move with informed decisions.

"This is why it is so important to find a professional real estate agent," says Elizabeth Dayton of Long & Foster. "The agent acts as an advocate for the buyer and can reveal information about properties that could sway a buyer's decision to even make an offer on a home."

Mike Downie, an agent with Weichert Realtors in Belle View, south of Alexan-dria, agrees.

"It's too difficult for a person who is flying in for the weekend to look for a house to possibly know everything there is to know about this area," he says. "An agent, who not only is informed on the trends in the market, but also makes transactions daily, is the best bet to help a buyer successfully find the perfect home."

For the agent to represent a buyer solely, the buyer is required to sign a representation agreement, which simply states that the agent is working for the buyer. If this agreement isn't signed, the agent even though he or she isn't hired by the seller is representing the seller of the home.

"The agreement really protects the buyer," Mr. Shields says. "[If this agreement is signed] then we, as agents, can let a buyer know if there are reasons he should or shouldn't buy the home."

Reasons can range from discussions about neighbors to planned development in the area, including highways and other types of construction.

"As professionals in the real estate market, we keep up on what's going on in the different neighborhoods," Mrs. Dayton says. "This information all factors into what we and the seller agree on when it comes to a figure on the bottom line of the contract."

Even if a seller is armed with a firm grasp of the market and a knowledgeable agent, he likely still will have to go through the contractual process a few times before an offer finally is accepted.

"It really is true," Mr. Downie says. "A buyer has to be ready to act immediately when he sees a property he might want to buy. There isn't a lot of time to think about it. In a matter of minutes, there could be several contracts already on the property. And the bottom line is, the best one is going to get the house."

One of the first considerations a seller has when reviewing contracts is whether a buyer is already approved for a loan.

"If a buyer is fully approved for a loan, their offer is going to have a better chance at making the cut than a contract that only has been pre-qualified for a loan," Mrs. Dayton says. "There's too much of a risk there for the seller if the person is only pre-qualified. There is always a chance that once that person's credit is reviewed, they wouldn't qualify at all."

Also, it is important to consider the amount a buyer might offer as "earnest money." Earnest money is a sum of money a buyer is willing to turn in with his contract. The money, similar to a deposit, is returned if the seller rejects the offer.

"It basically says to a seller that a buyer is serious about his offer," Mr. Shields says. "If you really want a certain property, it might be worth raising the amount of money you're putting up when submitting the contract."

No matter what, agents agree it's important that buyers don't get involved, one-on-one, in negotiations with the seller.

"It is too emotionally charged," Mrs. Dayton says. "When a person really wants a property, it's easy for the bidding war to get out of hand. And the worst thing to happen to a buyer is for him to regret the offer he made on a home."

This regret, otherwise known as buyer's remorse, is a very real condition that can turn a home purchase from a dream come true into a nightmare.

"This is why people shouldn't just jump into writing a contract if they are not sure they want the property," Mr. Downie says. "If you can't say, 'I would love to live here,' and feel good about it, then step back, walk away and think about it. If the house is off the market when you make your decision, there will be other properties. If your offer gets rejected, just keep trying. Eventually you will find a home."

Mr. Downie, who is an award-winning agent with Weichert, says he had about $3 million in lost contracts in March alone.

"It's [a] tough market out there," he says. "It's imperative that a buyer research and prepare to buy long before he plans to buy. Drive around neighborhoods, target specific areas, then get an agent to show you some homes."

Most of all, expect a few rejections.

"Because you have a few rejected contracts doesn't mean you should get rid of your agent," Mr. Shields says. "It just means it's a tough market out there and it's going to take a while."

LOAD COMMENTS ()

 

Click to Read More

Click to Hide