Consumer Reports: Tips when buying a house in a hot real estate market

While trying to close a deal on a new home with acreage, Consumer Report's own Lisa Gill made a creative offer.
PHILADELPHIA (WPVI) -- The housing market continues to be red hot. Prices are way up, and inventory is way down. Yet home sales surged to a 15-year high last year.

The typical home value in the Philadelphia area rose by 26% in 2021, while housing inventory fell by about 36%.

That means buyers are going to extreme measures to get the house of their dreams. But with big money on the line, that can be risky.

Consumer Reports has a way of navigating the current home-buying process more responsibly.

While trying to close a deal on a new home with acreage, Consumer Report's own Lisa Gill made a creative offer.

"The sellers had two aging donkeys on the property, so to sweeten the deal, I told them I would keep them," she said.

She also turned a blind eye to a few problems.

"The septic system and the well were in poor condition, as well as other problems on the property. So, I could have been on the hook for about $55,000 in repairs and taking care of the donkeys," she said.

The deal fell through, but Gill is not alone in trying to go above and beyond to seal the deal.

According to a recent survey, since the pandemic began, 28% of home buyers made offers over the asking price, while 26% agreed to purchase homes as-is.

"Many people are buying homes without requiring sellers to make fixes," said Gill. "Many are bidding on multiple homes at the same time, hoping to land just one."

If you can't afford to go above the asking price, there are ways to make your offer stand out.

Get 'up-front underwriting' from your mortgage lender if offered, which takes the standard mortgage pre-approval a step further.

During this process, underwriting gets all of your financial information vetted in advance and a firm pledge for a loan of a fixed amount, saving you weeks of back and forth paperwork.

Also, sweeten your offer by letting the sellers stay in the home for a set time after closing, potentially for free. Or let the sellers keep a portion of the money in escrow if the deal falls through.

And finally, consider a home that may not be on the market.

"If you see a home you like, but it isn't for sale, ask your agent to contact the owner and make an offer - hey, you never know," said Gill.

Also, some real estate agents recommend checking listings on Thursday evening when they say brand-new listings are more likely to post.

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