Over the past few months I have listed several townhouses for sale that went under contract quickly after a LOT of showings in a very short timeframe. For one such recent property there were six offers within 48 hours.
One of the things that struck me as we worked through that process was that there were five other buyers who really (!!) wanted to buy that townhouse and couldn't -- because there was only one townhouse to be purchased. As such, I feel bad for townhouse buyers in the current market. Townhouse buyers have a LOT of competition and I can imagine a single buyer making an offer on multiple townhouses and missing out every time.
So, a few tips for would be townhome buyers...
- Talk to a lender immediately to have a pre-qualification letter (or even better - a pre-approval letter) in hand when you are ready to make an offer.
- Track new listings closely so that you know as soon as a townhouse hits the market.
- Schedule an appointment ASAP to see the townhouse once it comes on the market.
- If you want to make an offer, put aside time right away to meet with your agent to do just that.
- If there are (or are likely to be) multiple offers, consider offering the full asking price, or even going a bit above the asking price - depending, of course, on how reasonable the list price is.
- Offer as sizable of a deposit as you are comfortable with offering. $2,000 is better than $1,000 is better than $500.
- Offer as short of a timeframe as is possible for the home inspection contingency - or forgo the inspection altogether if you are comfortable doing so, based on the property.
- If you don't need a closing cost credit, don't ask for one, even if the combination of the requested closing cost credit and your offering price still provide a desirable net price for the seller. Asking for a closing cost credit when you don't need one unnecessarily inflates the contract price, creating more of a potential issue of having appraisal issues.
- Include as short as possible (20, 25 or 30 days) of a timeframe for obtaining loan approval. You'll more easily follow through on this commitment if you are pre-approved instead of pre-qualified. Ask me if you aren't sure about the difference here.
- Include as short of a possible timeframe for closing on the purchase, while still taking into account any ramifications of the seller's situation or timetable.
- Include a cover letter to the seller if you so desire, to explain who you are, why you want to buy the townhouse, where you work, whatever is going to help personalize the offer and help the seller to see you as people rather than just proposed contract terms on paper.
- Be patient in waiting to hear back from the property owner. They may very well have quite a few showings over the first few days and may understandably want to let multiple buyers view the property and consider an offer before responding to the very first offer that they received.
I suppose one critical aspect that I did not list above would be to hire a buyer's agent to represent you in finding, pursuing and purchasing your townhome. I'd suggest you select someone who is highly responsive, professional and knowledgeable about the market.
Happy townhouse shopping!
(Or may it just not be too unbearably difficult, frustrating and tiring.)
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