Should You Cut Contingencies in Boston's Competitive Market?
When making an offer to purchase a home in Boston's competitive real estate market, you might want to consider what contingencies you can afford to include. In a seller's market, home buyers will probably find themselves in bidding wars where they will need a competitive advantage over other buyers. For this reason, many choose to opt out of including contingencies when placing their offer. Here are some factors to consider when making an offer on a Boston home.
The Market Is Growing
According to ZipRealty Housing Trends Report, the median home sales price in Boston this year has increased by 5 percent over last year. In addition, the total number of homes on the market has decreased by 21 percent.
What do these statistics mean for someone buying a home in Boston? They are an indication of a seller's market. With higher home prices, shorter time on market and a shrinking inventory all combine to make a market where home buyers cannot make demands as easily as they once could.
The Market and Contingencies
When making an offer on a home, buyers are would probably like the safeguards that come with contingencies. They would probably like to make the offer contingent on the sale of their existing home, or they may want to make the offer contingent on sealing their financing. A contingency on inspection is also popular. These are all important protections that home buyers should not give up without careful consideration with an experienced real estate agent. With that said, making your offer contingent on the ability to sell your current home can make it difficult for you to win a bid for a property in a competitive real estate market.
In Boston's current market, it's not uncommon for a seller to get multiple offers on a property. If you come to the table with too many unnecessary contingencies, you might end up losing the chance to buy the home to another buyer.
Making Your Offer More Appealing
In addition to limiting contingencies, you can take additional steps when making an offer on a home to make it more appealing. For example, you may offer to take on more of the closing costs, like the title service fee or the appraisal fee, instead of leaving these to the seller. You can also make your offer as close to or at the asking price as possible to avoid losing out to a higher offer.
Buying a home in Boston today means buying in a competitive market. You, as a buyer, are going to need to be flexible and lenient when making an offer on a home in this market. What's more, it is a good idea for homebuyers to reach out to their experienced real estate agent before waiving contingencies in an offer. If you are able and willing to do so, you can buy your dream Boston home in no time.