Future-pacing. What does that word mean exactly?
Real estate in the Lowcountry of Charleston, SC is humming along. At times it can be frustrating for buyers because you must be quick to take action. In a fast-paced, upward trending market, you must move with the flow of traffic or get run over. Allow me to explain, I’ve been in the real estate market for a little while now and I’m continually seeing folks who have found what they consider the home of their dreams. They hem and haw around, trying to decide how much to offer on the property and then it’s gone. That’s right, it gets scooped up and goes under contract sometimes within a few short hours of being listed. “How does that happen?” you might ask. Well, it’s like this… if you’ve been tracking along with my blog posts, you’d begin to understand that this place is a force to be reckoned with. What do I mean by that? Well, take this for what it’s worth but we have it all. We are small enough to be considered homey and big enough to enjoy some of the best concerts and tournaments that travel through. We have a landscape which is to be envied by most and the weather is spectacular most of the time. There are no shortage of places to worship and many of these have a history dating back to the founding fathers. There are, of course, beaches and scenic retreats to be found everywhere in the Lowcountry. Our economic growth is second to none, not to mention that we are always celebrating being in the top ranking cities in the United States for some reason or other. We have a cruise ship port and we also have a tourism industry that is the heart and soul of this amazing place. If you want nightlife, we’ve got it, however, if you want a seclusive retreat we’ve got that too. Am I beginning to make myself heard? This place is truly a paradise as far as I’m concerned. We also have a plethora of migratory birds, hunting, fishing, boating, horseback riding and numerous other outlets for nature lovers.
You Better Hurry Up
My point is this, when you find a house that works for you, in this type of market, you really have to act decisively and quickly. I know many people would say that this is a scare tactic or worse, that I’m a pushy saleswoman but, that’s simply not the truth. In my brokerage house, Century 21 Expert Advisors, we discuss this weekly and how we can combat the rush. We are always talking about how we can be ahead of the curve or the first to the party so to speak. We try to “future-pace” the buyer or seller so that they have a right-minded expectation before they are overwhelmed by having to make split-second decisions. In this kind of market, we are fortunate to be able to have a day to think about the transaction but, usually not. Future-pacing is our way of communicating what will likely happen, before you as the client, finds out the hard way. More gently put, we try to tell you what we think will happen or what you should do before you need to know. That way you feel more in control when we are embarking on a multiple offer situation or one which is a negotiators dream come true. More on that later.
I’m Telling You What’s Going To Happen Ahead Of Time…Please Listen.
I’m going to reiterate something for those of you who may not know this. Charleston is experiencing unprecedented growth both economically and in populous. This is not an exaggeration. I have a client who has tried to enter into a contract to buy over 3 times. In one of these circumstances, we were one of 3 offers. In another of these circumstances, we were one of 11 offers. Eventually, I had to seek out an off-market property and we are currently under contract with this for sale by owner (FSBO) seller. I had to find him. I literally had to reach out to property owners in the subdivision which she wanted to live in and tell them I had an interested buyer then ask them if they would consider selling their home. I’m not saying this so that I can receive kudos, I’m telling you that the market is fantastic right now. Time is of the essence. Be prepared to make an offer on the spot if you find a house that suits you. Find yourself a well-trained agent who is able to negotiate a contract accurately and decisively on your behalf.
Pre-Approval Is A Must
Now that I think you’re beginning to get the gist of this, I’m going to give you a few pointers.
Find yourself a good lender and get a pre-approval letter. Many agents will require it before they spend valuable time working with someone only to find out that they do not qualify for a mortgage quite yet.
I Need To Know What Is Important To You
Do some research yourself. Take some time to narrow down your likes and dislikes with respect to the features you wish to have in your new home. Be specific. Tell your agent if you have a dog and need a fenced in yard or if you refuse to pay a homeowners association fee (HOA) because these things matter.
That New Sofa and Loveseat Can Wait
Don’t make any big purchases before you close on the house of your dreams. You may not realize it but, this is a huge deal breaker. Lenders are very particular about your debt to income ratio. A new car can easily throw that out of proportion and cause you to be rejected for financing. So can that new furniture, so be careful.
Time Is Of The Essence
Make sure you are aware of the deadlines involved in the contract. Get your agent to go over the contract beforehand. Get a copy of it for your records and take it to an attorney for review if necessary.
This Is An Emotional Roller Coaster I Hope You’re Seatbelt Is On.
Most importantly, be flexible. You may not get the first or second house that you put an offer on. Don’t let this discourage you. Be willing to put forth your best effort to find another house that suits your needs, wants and desires. There is a lot of benefit to buying and almost none in renting. Be relentless…and flexible.
The Sweet Spot
So, what is a negotiators dream come true? I’ve seen my fair share of contracts and to tell you the truth, some people have wild ideas about what is worthy of negotiation and what is not. Recently, I had an offer come in on a house that I had listed. The offer was $64,000.00 less than asking price right off the rip. Now, I say that because often times we come to a place of 2nd negotiation after there is an inspection and it comes up with some material defects. As an agent, it’s my job to respond accordingly. There is a special place where you can convince the seller to entertain this offer without shutting it down completely. Now picture yourself in the seller’s shoes. Your house is listed for several hundred thousand dollars and this offer comes in which is potentially low enough to eat up any equity you may have in the place depending upon when you purchased it. In this case, the sellers had not owned the house for very long and were not in a place whereby they had gained much in appreciation. It would have been easy to simply tell the buyer that they were not interested but, that shuts down all communication. Instead, I had to divide and conquer. There has to be a place of mutual agreement and it’s my job to find that common ground. Negotiation is an art. It is both strategic and tactical. That means that you have to have a plan and it has to be actionable before going into discussions with the other party. Now, I’m not going to tell you that I’m God’s gift to negotiators but, I can definitely hold my own. As it turned out, we actually came to an agreement on price in this transaction. Unfortunately, after the inspection, it was found to have some foundational shifting and we were back to square one. Only this time, we were starting at the price we had negotiated down to. This transaction did not close because the seller was not willing to reduce the price by the estimated cost to repair the foundational defect. I don’t blame them. It was almost $40K worth of repairs. So, how does this pertain to future-pacing? Well, as I previously mentioned, I am always trying to prepare my client in advance for what could potentially happen. Fortunately, this seller was not unfamiliar with the dreaded 2nd negotiation. He knew well in advance that this could be a breaking point. It was and he handled it like a champ because he had time to consider all of his options ahead of time.
This Can Work For You Also
In your life, next time you need for someone to know the ropes before they do the tight-rope walk, try future-pacing. Your clients will appreciate your candor and expertise as well as the level of professionalism you demonstrate by preparing them in advance for what is to come. This way, they will have the luxury of making decisions beforehand instead of on command.
Here Is A Demonstration
Now, let me future-pace you for a moment. Charleston is on the rise. Up and coming. Now is a great time to buy some real estate or better yet, sell some real estate and upgrade your lifestyle. If you already live here, check out my blog about Using Your Home as an Investment
In the meantime, if I can help you with any real estate decisions, feel free to call, text or email me.