House, home, abode, pad, crib, whatever you call it, shelter is right up there with food, water, and oxygen as far as basic human necessities. An adequate living space is one of the most important parts of our life experience and can define a ton, if not all, other aspects of our lives, for better or for worse. Taking a step past the bare minimum of four walls, a foundation and a roof, a home can be a work of art and an expression of your inner self. A place to grow, a place to raise a family, somewhere to return to that you can leave the rest of the world behind and just be yourself. If you haven’t noticed, I truly believe the basis of a successful, happy life starts at home!
Everywhere you look there are houses. So many houses. Everywhere. Historic, modern, urban, country, cute, ugly, big, little, there’s a house for everyone. If you don’t have one yet it could be an intimidating venture; there are so many unknowns! But first, let me introduce myself – my name is Kara Reed and I am a Licensed Real Estate Salesperson in Rochester, NY for Hunt Real Estate and I work with Chris Carretta, an Associate Broker also with Hunt. I love helping people find their dream home and being a part of such a huge milestone, but as you probably have heard, it’s a little tough for buyers right now. We are in a “sellers market” which basically means the sellers have the upper hand in the negotiating process. In short: there are more buyers than homes for sale. This creates a high demand, higher-than-list sale prices, strong competition, multiple offers, and inevitably, winners and losers. It’s not impossible though, buyers are getting houses. How? Well, let me give you the rundown.
First let’s talk about the market in Rochester. If you have had friends buying or selling or if you have been looking to purchase for yourself in the past two years or so, you’ll know that there is a lot of competition due to a critically low inventory of houses. Properties can receive multiple offers on houses which drives the price way over the asking price, especially if the house is in great shape (condition/updates are huge drivers of competition, in addition to location). There’s a lot more to it than that but what results is a difficult market for buyers to purchase in. You might be wondering what actually takes place during the buying process in this type of market.
Okay, so let’s pretend you are ready to buy your first house and you’re renting/don’t have a home to sell. You’ve been working on your credit and saving up your extra money and you reach out to me, a licensed real estate agent. What would happen first is that I would talk to you about your goals, your timeline (when you would be looking to move), your preferred locations, your style (my personal favorite part), and your financial situation. It’s also very important to keep “re-sale” in mind. That means when and if you ever need to sell the house, it should be something that will be easily marketable/salable (proximity to a busy road, railroad tracks, etc are all things that might deter a future buyer).
Regarding financing, I don’t get too involved because as soon as we have this preliminary conversation, I’m going to tell you to get what is called a pre-approval from a bank, which will tell us what you can afford based on your credit score, debts, comfort level, etc., but I will need to know a range of where about you are financially in order to determine what locations are realistic for you to be looking in. Your finances will really guide the process, especially in this market. I also cannot stress to you enough — when getting pre-approved, go with a good bank! Don’t choose your bank because it’s where your parents went and that’s just where you always have gone. Shop around for rates and pay attention to how responsive/communicative the bank is because getting a mortgage is a stressful process and you are inevitably going to have questions and nothing is more frustrating than not being able to get an answer when you need one.
Please do not use an online mortgage website that you saw an ad for on Instagram. Just don’t. Trust me. At this step in the process, while you’re getting pre-approved (you can also get pre-approved/qualified before you even talk to a real estate agent), I am setting up what are called auto-searches based on the criteria that we discussed during our meeting. Things like location, square footage, garage spaces, types of home, and of course, price, are all criteria that we can input so you only see homes that fit those constraints. You’ll start receiving emails and you can start officially shopping for your house.
In this market where the inventory of homes is so historically low, the chances of a buyer getting their offer accepted on the very first house that they write on are pretty slim but not unheard of. It happened for a couple that I am working with who are moving from out of state to Pittsford, which was extremely lucky BUT they did exactly what they were advised to do by their trusted real estate agent. A tactic that buyers and buyer’s agents are using in response to the delayed negotiations is what is called the escalation clause, which is a page/addendum that is included in the purchase offer contract. It is essentially a bidding technique, where you set a range of prices that you would purchase the house for. For instance, (just using easy whole numbers) the house you want to buy is 200k but we know there has been a lot of interest in the house by other buyers. We could start your bid at 200k (or any number) and escalate up to say, 300k, where you would pay, say, five thousand dollars over the next highest offer. The next highest offer might only be 260k, so you would ultimately pay 265k for the house. This seems like a huge range and you’re probably wondering who would pay $65,000 or even $100,000 over the asking price for a house?? Well, if you didn’t know already, it is happening and will continue to happen until the market shifts. There are so many more details to this process and many, many more factors that contribute to a strong offer, but excellent financing, flexibility, realistic expectations, and a good real estate agent that knows the market and knows what they are doing is what is going to get you a house.
After you get an accepted offer, you’ll work with mainly three people as part of your team. Your agent, your loan officer, and your real estate attorney. The process of shopping for the house is usually what takes the longest (my husband and I closed on our house in September but we had been seriously looking since January), and the process from accepted offer to closing is typically around the 60 day mark. If you’re interested in real estate and want to know more about the finer points, this is where I shamelessly plug the podcast that I have been working on called Real Talk Rochester. Chris Carretta (who is the chair of the Preservation Board for The City of Rochester and a board member of the Landmark Society as well as a member of the Landmark Society’s Executive Committee) and I interview industry professionals about everything from mortgages to staging your home before you sell to real estate photography so it’s good for all types of listeners. We pack a ton of good, up-to-date information in them so please check them out on YouTube or Apple Podcasts if you want to know more! And say hi to me on our Instagram @realtalkrochester!
I hope this clarifies a little bit about the home buying process. Buying a house is such an exciting time and can be a lot of fun. I absolutely love seeing buyers’ faces light up when they can just tell that it’s the one. Loving where you live is such an important part of being alive and buying a home is absolutely something that you can achieve! It’s such a good way to build your wealth and expand your horizons. If you ever need help finding a home, I will be here! If you’ve made it this far, thank you so much for reading!