Experts: Buyers moving at top speed should use caution

whatyougetThe low supply and high demand for residential real estate in the area obviously tips in the favor of sellers. Buyers, on the other hand, are swimming in a pool of competition – trying to get their bids in before someone else does.

An unfortunate result of rushing into the process before thinking the situation through is that potential buyers can find themselves in a bind.
As a result, they sometimes pull out of the deal, leaving sellers no choice but to begin the process again.
“A lot more houses are falling out of contract because buyers are having to move so fast,” said Kim Thompson, broker associate at Colorado Landmark-Boulder.
To reduce the chances of that happening, many sellers are waiting a few days before evaluating all offers, she said. The practice makes it easier on all parties.
The market, however, is still a rough one for buyers, even though they sometimes are being given a few extra days to consider putting in a bid.
“I’ve heard that inventory is down about 70 percent,” Thompson said. “And about 95 percent of all houses have a competitive situation.”
Getting a better place in line is causing shoppers to waive some of what used to be common procedures when buying a home.
One home for which she is the listing agent is at 7855 Spring Drive in Boulder. The 2,846-square-foot, three-bedroom house lists for $999,900.
To stay in the running for such properties, some buyers are waiving appraisals and loan contingencies.
“The market is going up faster than comparables are,” she added, as a reason for dropping appraisals.
Waiving loan contingencies, however, requires more planning before using it as a barganing tool because it means that buyers waive their right to back out of a contract if they don’t qualify.On the off-chance that the loan doesn’t go through, buyers lose their earnest money.
Get pre-approval from a lender by going further than just making a phone call. Thompson’s advice is to be prepared, and go for the full approval before hitting open houses.