Buying Ina Limited Inventory Market
May 15, 2021
Buying In Today's Limited Inventory Market
By Sandra C. Brown, Principal Broker Dream Catcher Realty Sevierville,TN
With the extremely limited inventory market many buyers with encouragement from their agents are taking bold steps to make their offers seem attractive and hopefully get accepted. These tactics all have some degree of risk.
I will review some of the more common ones and briefly mention the risk.
1) I Love Your House Letter. This opens the door for housing discrimination.
2) Making An Offer Sight Unseen. Photographs and videos may omit or not clearly show the overhead high tension electric lines or all the damage to the back bedroom floor.
3) Waiving the Financing Contingency. It is quite possible the house will NOT appraise up to contract price. If that happens then you need cash to make up the difference.
4) Waiving the Inspection Contigency. A home inspection could find aluminum wiring, mold/mildew or a roof leak. The cost to cure be huge.
5) Escalation Clause. This simply says if another party offers $xx I will automatically raise my offer to $xx plus a predetermined amount. You could very well end up paying over market value or having the house not appraise for the contract amount.
6) Releasing Earnest Money to Seller and/or High Amounts of Earnest, Basically you just gave the earnest money to the seller with no control. It is quite possible if the contract does not close you will never see the return of the money.
Before using any of these tools consider the postive and negative. Have a discusssion with your real estate agent. You can get the house but you could end up with other issues as well.