After our (virtual) client appreciation party this year, I heard from one of our happy homeowners about their vacation home search. She wrote:
We are working with the agent who previously helped us with a rental. He is absolutely not at the caliber of working with you and your team, but I think for second home market he is fine. I’ll ping you if it’s not working out. It seems we need to work with an agent in order to hear about listings before they are put online. Some condos are selling above asking, before their first open house.
Inventory is silly-low everywhere, but especially in resort areas. You need someone connected locally, for sure.
Don’t get too hung up on “over asking price.” One of the scare tactics that works really well is to underprice a property by a lot, then have many competing buyers. If a place is worth $400,000, they price it at $350,000. Then people see it, and offer “over asking.” Maybe they get 15 offers. But 12 of them are under $400,000. A buyer hears that there are 15 offers, and wants it, so they offer $450,000 for it, because they are afraid of the 14 other offers. Defense against that is to get an agent who will tell you the fair market value of the property before you make your offer.
Good luck! I hope you get a great place.
This got me thinking about all our clients who are buying vacation property, or relocating to remote work sites away from the city. It is definitely a thing in 2020+.
Advice for relocating buyers or second-home buyers:
Find a local agent. Find an agent who will provide a comparative market analysis for any property that you are considering buying.
Find someone committed to being a buyer’s agent.
In dual agency firms (ones that represent sellers and buyers), listings (seller clients) are more valued by management than buyer clients are. The most successful agents are the ones who list a lot of property for sale. Newer agents work as buyer’s agents until they “grow” into a top-producing listing agent. Their agent training includes how to get the highest price for the seller, and the lowest price for the buyer. Only some of them will risk conflict between maintaining good office relationships and advocating for you.
Find an Exclusive Buyer’s Agent (EBA). That is an agent who works in a firm that doesn’t help sellers market their property. In EBA firms, all of the agents agree to work to help buyers get the lowest prices and maintain their rights in real estate purchases. All their training is towards the goal of being effective for buyers. Sometimes, this includes training about what seller’s agents do, and why, so that we can effectively negotiate against them.
EBAs know other EBAs. We are a small subset of real estate agents. So, if you know an EBA, chances are, they know whether there is an EBA in the place you are looking to buy in. Ask!
If you don’t already know the area where you are moving or buying a second home do these things:
First, familiarize yourself with the area
Before 2020, I recommended this: Do what you normally do: Go grocery shopping, go to a playground, go to a movie, walk through town, and/or go out to dinner. If parks are important to you, then go to the parks, same for libraries, community centers, senior centers, schools, and little league games.
In 2021, you need to do that online, for the most part.
- Follow news about the local government. It will affect your municipal taxes and services. Look at the websites of places you will use when you live there. See what virtual events are offered. Go to some.
- Follow local social media to get an idea of the style and values of people who live there.
If you do not like being there, you are in the wrong place. This is true virtually, too.
Second, check out what the market is bearing there
Once you know the area or areas you like, then you can more comfortably balance the questions of size and condition. Now is the time for a full-blown Multiple Listing Service (MLS) search. Ask your agent to provide you with information on what has sold in your price range. This will give you a better idea of what the market has been bearing.
When you look at recently sold properties, you can see how often property is going over asking price. You will also see that properties of a similar size, condition, and location generally sell within a similar price range. If those properties and that price range is good for you, then you are ready to go house hunting.
Here is some more detail about changing towns, for people changing towns for their primary residence.