How to Navigate a Hot Housing Market

Bryan Greene, the association’s vice president of policy advocacy, said in an interview that the practice had been flagged out of an “abundance of caution” and that he knew of no specific lawsuits resulting from the use of seller letters. Still, he said, it’s an area where agents should “tread carefully.”

In some states, buyers may offer direct incentives to sellers outside of the purchase price, sometimes called “option” money, said Maura Neill, an agent with Re/Max Around Atlanta. “It works like a bonus,” she said, noting that the practice is allowed, although not necessarily widely used, in Georgia.

She cautioned that buyers and their agents should clarify their state’s laws, but “if you can make it work,” she said, “it’s a very strong tactic.”

Shoppers need patience, plus a willingness to move fast, Ms. Neill said. Kim Secia, a technical support director for an online education company, said she began working with Ms. Neill in January to find a home in Atlanta’s midtown district. She was preapproved for a loan with a local lender and found a property she loved, but she hesitated when Ms. Neill urged her to make an offer immediately.

“It was the first one I saw,” Ms. Secia said, and she wanted to look around. That, she learned, was a mistake. The house sold quickly, and weeks passed before another suitable property became available. This time, she was ready, and agreed to offer above the asking price.

“I knew I had to pull the trigger,” Ms. Secia said. She lost out to another buyer, however — probably someone making an all-cash offer, she said.

At the end of April, a condominium near Piedmont Park went on the market. Ms. Secia offered a quick closing, which was important to the sellers, and agreed to waive the appraisal — also an increasingly common practice in competitive markets. That means that if a buyer is financing the purchase with a mortgage and offers more than the property appraises for, the buyer agrees to pay the difference in cash at closing. That didn’t happen, Ms. Secia said, but it added another level of stress.

Article source: https://www.nytimes.com/2021/05/14/your-money/buying-home-market.html