| Issue date: May 30, 1999
Home Sweeten the deal Home
Creative thinking may be the best way to close a deal in today's real-estate market.
Talk about creative: Real-estate broker Amy Grossman, left, helped her sister Jane Matluck win the bidding war for this Chappaqua, N.Y., house by offering the sellers a week's stay at their parents' house in the Caribbean. |
 f you're thinking about selling your house, you've picked the right time. Both existing and new home sales were at an all-time high last year, "the best year ever in the housing market," says David Lereah, chief economist of the Mortgage Bankers Association. This year has started strong, too. But if you're looking to buy, the picture isn't so rosy. More and more buyers are finding they need to be creative to get the house they want.
How creative? Boulder, Colo., writer Bruce Schoenfeld and wife Julie, a lawyer, sweetened their bid on a 1934 rambler with several valuable bottles of wine from Bruce Schoenfeld's collection. "I could give [the sellers] wine cheaper than money," says Schoenfeld, who has bottles worth $100 today that he bought years ago for $20. "My broker told me, 'If you want to make it work, do whatever it takes.' "
That's what Chappaqua, N.Y., real-estate broker Amy Grossman did. She was bidding on a 1960s colonial on behalf of her sister and brother-in-law. Five couples wanted the house. Grossman went over the asking price, waived the inspection and mortgage contingencies and threw in a week at her parents' house in tropical St. Martin. "We thought it would make the offer rise to the top," she explains. She clinched the deal.
Traditional ways to make your offer stand out:
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10 hottest housing markets
Metro areas with the greatest percentage increase in average house prices in 1998:
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1. Boulder-Longmont, Colo. |
22.5% |
| 2. Lansing, Mich. |
15.6% |
| 3. Davenport-Moline-Rock Island, Iowa-Ill. |
13.3% |
| 4. Kalamazoo-Battle Creek, Mich. |
12.5% |
| 5. San Jose, Calif. |
12.2% |
| 6. Santa Rosa, Calif. |
12.2% |
| 7. Vallejo-Fairfield-Napa, Calif. |
12.2% |
| 8. Saginaw-Bay City-Midland, Mich. |
12.0% |
| 9. Denver |
11.7% |
| 10. Orange County, Calif. |
11.4% |
Get preapproved for a mortgage. This involves going through the same borrowing process as if you actually had made an offer. The bank verifies your employment, income, savings, investments and debts and gives you a letter detailing the amount it is willing to lend. This tells the seller you can close the sale much faster than someone who isn't preapproved.
Don't confuse preapproval with prequalification, notes Ray Brown, author of Home Buying for Dummies (IDG, $16.99). "Getting prequalified just means you have a pulse. If you're preapproved, the seller knows you're firing live ammo."
Fine-tune your street smarts. Visit enough open houses on your own to get a sense of local property values. You won't know good value unless you do as much market homework as your agent does.
Temper your enthusiasm. It's tempting (particularly if you've already lost a house to another buyer) to waive things such as inspection and mortgage contingencies. But that can be unwise: If a house turns out to need a new roof or other major repair, you have no recourse. And if you can't arrange financing, you lose your deposit.
Lauren Rubin, who has been house-hunting in Scarsdale, N.Y., since January, has developed her own method. She simply won't get into a bidding war. "It's so not my personality," she says forcefully. "Now I won't even go and see a house until it's been on the market for a week."
Send Contributing Editor Jean Chatzky your questions on personal finance. E-mail finance@usaweekend.com or write Personal Finance, USA WEEKEND, 1000 Wilson Blvd., Arlington, Va. 22229-0012.
Photo Credit: ERICA FREUDENSTEIN for USA WEEKEND
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