Home Buying: What Is a Blind Offer?

There are many home-buying strategies, and some are riskier than others. One of the trickiest options is the blind offer. In the right situations, a blind offer makes sense, but it can easily backfire. 

blind offer

Here’s what a blind offer is, and when you should (or shouldn’t) attempt one.

Are Blind Offers the Right Home Buying Strategy for You?

The definition of a blind offer is simple: It is drafting a purchase contract for a property without having inspected the property in person. In other words, the buyer is going in “blind.”

When making a blind offer, you may not be completely blind. If there are photographs of the property or an online virtual reality walkthrough, you may be able to get some idea of the property’s condition. However, because you’ve never visited the property personally, you must rely on other sources.

The primary benefit of a blind offer is that it’s quick and can potentially speed up the purchasing process. There are several scenarios where this makes sense, including:

  • Flipping – You may have no intention of utilizing the property yourself and are simply looking to flip it on the market, there may be no reason to give it a thorough inspection in person.
  • Long-term investment – Some operations, such as property management groups, may simply want to buy land for the sake of longer-term plans. As with flipping a property, if don’t care what’s currently going on with the property, a blind offer can make sense.
  • Low housing availability – If you need a property in a particular area with low volume and high demand, blind offers can be a way of improving your chances of a successful purchase. 

The Dangers of Blind Offers

The main risk of a blind offer is obvious: You will not likely know about problems with the property, such as neglected maintenance resulting in repair issues. The seller is required to disclose many problems as part of the sale, but there could easily be others that aren’t disclosed.

Also, keep in mind that in most states a property’s seller is only required to disclose issues they are personally aware of. If they haven’t conducted a property inspection lately, there could easily be hidden problems. These problems could lead to expensive repairs.

Blind offers are typically a home-buying strategy for investors only. If you’re buying a home to live in or to utilize as a rental, be sure to inspect it in person.

New Home Buying Tips for 2024

buy a new house

Are you planning to buy a new house in 2024? You must stay on top of the rapidly changing market. Housing prices are fluctuating and are currently higher than normal. Mortgage rates are high as well. You’re going to need to be savvy to get a good price for the home you want while getting a mortgage at the rate you want.

Here are a few home-buying tips that might make the process a little easier.

Four Critical Home Buying Tips in 2024

1. Look into new construction

In years past, the recommendation was to buy an existing home, but the situation has changed in the 2020s. The supply of existing homes on the market is currently quite low, and prices on them can be high; possibly too high when compared to the real value of the property.

Meanwhile, many construction companies are hurting for work. This has created a situation in which you may be able to get an excellent deal on new construction, especially if you’re willing to forego fancy amenities such as granite countertops. 

2. First home? Make the most of incentives

Many states have programs in place to incentivize home purchases for first-time buyers. Depending on the state, these may come as a financial rebate on the home, tax credits, or special low mortgage rates. Right now, it pays to do some research and see if there’s any way you can qualify for government assistance.

3. Shop around for mortgage rates

With mortgage rates so high in 2024, you should do at least as much shopping for your mortgage as you do for your new home. Don’t automatically use the lender with which your real estate agent partners. Contact every bank and lender you can find and spend plenty of time exploring your options. Having a pre-approved mortgage in hand can also be a big help when bidding for homes!

4. Consider waiting until later this year

It might be a good idea to simply wait for a few months before getting serious about your purchase. It isn’t guaranteed, but many market watchers think the Federal Reserve will lower prime rates in a few months, which would lead to mortgage rates dropping as well. You may be able to get a much better deal if you hold off on purchasing.

Finally, as always, be sure to look for a great real estate agent who will help you find the best deals! Click here to learn more.

Does It Make Sense To Buy a House in 2024?

buy a house

The new year is here, and for many people, that will bring the question: Is 2024 a good year to buy a house?

The housing market is in flux, which is leading to a lot of uncertainty among would-be buyers. The current mortgage interest rates are a particular sticking point, having hit a high of 7.79% on 30-year-fixed mortgages by the end of 2023. That will add considerably to monthly payments for a new home.

However, interest rates alone shouldn’t be a reason to avoid buying. There are some unique aspects to the housing market right now which means it could still be a great time to buy.

4 Reasons To Buy a House Despite High Interest Rates

1. Home prices are continuing to (slowly) rise

While the upswing hasn’t been dramatic, home prices have been creeping upwards by a few percent a year for a few years now. Much of this has been driven by investment groups buying property in bulk, which creates demand and pushes prices up. Nothing suggests this trend is likely to change any time soon. Pushes to limit corporate property investment are limited to a handful of regions. This means even with higher interest rates, waiting another year could end up costing more than you’d be paying today.

Also…

2. You can refinance later

Just because you have a high interest rate on your mortgage doesn’t mean it has to stay that way. Rates are likely to decrease again over time, so after a few years, you will probably be able to refinance at a lower rate. 

3. You’ll have less competition

Another major point in favor of buying this year is that many people won’t be buying. The high interest rates are scaring some people, and that’s good for those who have the fortitude to buy. You’ll have less competition for prime homes, and may even end up in a better negotiating position because of it. Homeowners who are highly motivated to sell but unable to find buyers due to higher interest rates may also be more flexible about pricing.

4. If you need a house, it’s not worth waiting

Some people buy property as an investment, but others simply need a new home. If that describes you, the interest rates aren’t nearly high enough to make buying prohibitive. Buy the house you need now and look for better financing options down the line.

Need help finding a house you can afford? We can help! Just contact us for a free consultation.

Buying a New Construction Home: Pros and Cons

buying a new construction home

When you’re in the market for a home, one of the first decisions to make is whether to buy an existing home on the market or pay more for a new construction home. New construction has a lot of benefits that can make it worth the investment, but there are drawbacks that should also be considered.

Is a new construction home right for you?

Pros of Buying a New Construction Home

  1. Customization is possible – Depending on the developer, you may be able to customize your new home as it’s being built. If you have a specific vision in mind, this could be easier than searching for an existing home that matches your needs.
  2. Energy efficiency – New constructions are typically built using the latest energy-saving standards. All the built-in appliances, insulation, etc., will be brand-new and in top condition. This should lower your monthly power bills.
  3. Everything is new – The biggest benefit to new construction is that everything is new. It’s going to all be built to code, and in all likelihood, it will be years before the home needs major repairs or renovation. 
  4. Warranty protection – Most new construction will carry warranties from the builders and/or material manufacturers. If there is a problem, repair should be inexpensive.

Cons of Buying a New Construction Home

  1. HOAs – It’s rare to find new-construction homes that aren’t part of a homeowner’s association, and new-construction HOAs tend to be the strictest. They could impose rules that feel prohibitive to your lifestyle.
  2. Lengthy construction time – New homes can take several months to build and many factors can delay construction. Expect to wait three months minimum. Six to 9 months isn’t uncommon. If you need to move quickly, buying a new construction home may not be possible.
  3. Limited landscaping – Your new lawn is likely to be underwhelming for months, if not years because the greenery needs time to mature. This could be offset with specialty landscaping, but that increases the price.
  4. Off-gassing – “New home smell” is a real thing. Building materials and chemical substances used in new-home construction can release airborne toxins. Families with allergies, breathing conditions, or sensitivity to VOCs (volatile organic compounds) may have issues with new construction.

There’s a lot to consider when exploring new home options. For help in the [CITY] area, contact [CLIENT].

Should You Look at Short Sales When Buying a Home?

If you’re looking at buying a home, you’re undoubtedly looking for good bargains. And under the right circumstances, a short sale could be just what you’re looking for. However, this is a somewhat rare type of home sale, and there’s no guarantee it will work out.

What Is a Short Sale?

A short sale occurs when a home is valued for less than its remaining mortgage, and the mortgage lender agrees to settle the debt for a smaller sum than they are technically owed. This allows the home to be resold.

Short sales typically happen when homes have depreciated for some reason. For example, neighborhood property values have dropped or a property itself may be neglected and lost value. In some cases, the property may have lost so much value that it’s no longer realistic for the mortgage lender to expect full repayment. 

Much of the time, the home’s current owner will be in some form of financial distress that prevents making mortgage payments. In this situation, the lender may be willing to agree to a short sale to get rid of a property that could cost the financial institution more money in the long run. A short sale can also bring in more money than if the home is repossessed and auctioned, which is a great motivator for the lender and a good reason to go along with it.

The Challenges of a Short Sale

The biggest hurdle to overcome when requesting a short sale is the mortgage lender. Financiers aren’t in the business of losing money and will be reluctant to discharge the mortgage for less than its value.

The current homeowner must convince the lender the mortgage is unlikely to ever be paid off. Sellers will need to be highly motivated to go through this process, typically to get out from under debt they can’t comfortably repay.

There’s also a high likelihood that the home has other issues. It may be in poor repair or there could be fines and liens attached to the property. A buyer will need to be very careful, surveying and researching the property thoroughly, to be sure it’s a good deal.

In the right conditions, a short sale can result in a bargain buy. But it’s a difficult deal to broker and many factors could confound the transaction. 

If you’re buying a home we can help! Contact us to discuss your needs!

Should You Buy an Unfinished Home?

Unfinished Home

Of all the real estate investments you could make, an unfinished home is one of the riskiest. But in the right circumstances, it could also be easy money.

An unfinished home is just that: a house that was under construction and the construction was abandoned before completion. Unfinished homes could be nearly finished, barely begun, or anywhere in between.

Is this a purchase you should consider?

Benefits of Buying an Unfinished Home

Why purchase an unfinished home? There are several potential benefits:

  • The price will typically be extremely low. In some cases, you may even be able to buy the entire property for less than the lot alone would sell for.
  • If the home is nearly finished, with the roof, windows, and doors already in place, it may be completable without much more investment.
  • If the work is barely started, you could potentially bulldoze the construction and then sell the property to turn a profit.

Risks of Buying Unfinished Construction

There’s a lot that could go wrong with buying an unfinished house. Discretion is necessary.

  • If the property has been abandoned for a long time, it may be an absolute mess inside. There could be animal life or even squatters in residence.
  • The realistic market value of an unfinished house will drop rapidly the longer it’s been abandoned and unkempt.
  • The costs of dealing with it – finishing or demolishing – may ultimately eat any profit you could have made.

Other Factors To Consider

What should you examine when deciding whether a particular unfinished property is worth the investment?

Climate

The hotter and drier the local environment, the less damage will be done to the extant construction. Buying unfinished homes in a wet climate is rarely a good idea because they deteriorate quickly.

Property Valuation

Often, tax assessors will make an initial valuation based on what the value would be if the house was finished. For example, it might be worth $100,000 on paper, but only a tenth of that in reality. This could be an advantage or disadvantage, depending on your situation and goals.

Flipping

It’s tough convincing people to buy an unfinished home. Think about whether you can realistically make a profit. 

Unfinished houses can be a high risk/high reward investment. In the right situations, you could get a property for a song and quickly flip it for a profit. But you could also just as easily get stuck with a costly and rapidly deteriorating encumbrance.

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Randy has enjoyed over 32 wonderful years in the Real Estate industry making dreams come true for homeowners.

Superior customer service is #1 to Randy and he provides this to all of his clients using knowledge, professionalism, integrity and persistence.

Randy is a successful and experienced real estate agent who expertly represents both buyers and sellers. Scores of Charlotte area residents have trusted Randy in the process of listing their homes to sell.

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