If you’re out there searching for a home in the Cambridgeville area, you know that this is a tough market for buyers. Inventory is at record lows and demand is high. You’re competing not only with other potential homeowners, but also investors and developers. And a lot of your competition is making full-cash offers and foregoing inspections. These completely “clean” offers can be hard to beat, and you may have already lost out on a place or two to such offers.
But it’s not all doom and gloom out there…
In the past six weeks, eight of my buyer clients have had accepted offers. Only one of these was a no-contingencies offer. The other seven were all financing their purchases and doing home inspections. One even had a contingency to close on their current home, which was under agreement when we submitted the offer on their new place. Imagine!
So if you’re willing to hang in there, here is some advice to increase your chances of buying a home:
Be Realistic
Ask yourself (and your agent) this question: are you being realistic?
Yes, it would be great to have a two bedroom condo with parking in Harvard Square, but if your budget is $400,000, your chances of finding such a place are slim to none.
And you may be pre-approved for a great first-time homebuyer program that only requires 5% down, but if you are going into a multiple offer situation where other buyers have 20% down or more (or cash), it is unlikely a seller will entertain your offer.
And yes, it makes a whole lot of financial sense to purchase a two-family where you can live in one unit and collect rent on the other, but unless you have cash and are willing to waive the inspection contingency, it’s highly unlikely you will be able to compete with the many investors and developers bidding on the same property. At least in Cambridge and Somerville. Which brings me to my next piece of advice…
Expand Your Geography
If you absolutely MUST have a two-family, or 3000 square feet of living area, or an attached garage, or if you only have 10% to put down, or if your budget will only buy you a studio condo here and you really want a two-bedroom – you may need to expand your geographic range. And you won’t be alone.
For several years, buyers looking for single-family homes who were priced out of the Cambridge and Somerville markets have been going to Arlington. When Arlington got competitive and prices started going up, West Medford became a new option. And now that West Medford is so hot, the next frontier seems to be Malden.
But you may not even have to leave Cambridgeville to increase your chances of finding what you want – sometimes just being willing to get further from the Red Line can help. Have you thought about East Somerville? It may seem remote now, but a lot is changing and in a few years, my guess is it’ll be just as hot as Union Square. But for now… it’s less competitive and so presents an opportunity for those willing to take a chance.
Target Older Listings
Granted, most listings in this market go under agreement within a week, so the pool is not super large, but occasionally, for whatever reason, something doesn’t sell that first week and then guess what? You might not have to wait to submit your offer by a deadline designed to drive a bidding war. I had just such a scenario last week – a super cute condo, priced appropriately, amazingly didn’t get offers that first week—probably because there happened to be a bunch of other stuff at the same price point—so my lucky buyer submitted an offer the second week the property was on the market and didn’t have to compete!
There are also cases of properties coming on the market overpriced (sometimes only slightly so, but enough to turn off buyers), that sit and sit and sit waiting for someone to come in and pay the asking price. But guess what? Eventually, the list agent and/or seller is going to realize they need to reduce the price. And often when that happens, suddenly they will get multiple offers. But savvy buyers and buyer agents know that this period before the price reduction is a great time to come in with a good, market-priced offer and beat everyone to the punch. I’ve had several clients get great properties with this strategy.
Sooooo… I hope this advice is helpful to those of you out there on the house hunt. Feel free to get in touch if you have questions!