Spring is blooming in the greater Boston area, and with the thawing temperatures has come a thaw in the residential housing market. People hoping to make a real estate purchase this season are entering the market in droves, and what was once a stagnant home sellers’ environment has turned into a blossoming market of opportunities.
Although home prices are down approximately 16% since reaching their highest amounts eight years ago, homeowners who have placed their properties on the market are receiving multiple above-asking price bids. Some buyers who are intent on completing real estate transactions are even waiving standard contract contingencies, making the transfers of property to them much easier on the sellers.
The competitive market in and around Boston has frustrated some potential buyers who feel that they simply cannot outbid the myriad of other people making offers on moderately priced condominiums and single family homes. While real estate professionals suggest that as buyers expand their housing searches to less expensive communities around Boston the competition will decrease. Others suggest that prospective buyers proceed with caution when engaging in what has become frenzied real estate bidding.
Both buyers and sellers involved in real estate transactions have rights with regard to what they will allow in the purchase agreement. Buyers may seek to incorporate protective contingencies into the agreement that will allow them to back out of the contract if the contingencies cannot be met. Such contingencies may include securing an adequate mortgage to pay for the property, a home inspection to investigate any serious problems with the structure, or a search of the property’s title to find out if any debts are secured against the property making sure the seller is the actual owner of the real estate.
Sellers must also make important decisions regarding what they will accept when receiving an offer to buy their home. While sellers cannot discriminate against buyers based on certain protected classes, sellers can terminate a purchase negotiation if they learn that the buyer cannot finance the real estate purchase or if they decide that they no longer want to sell.
As more buyers flood the real estate market, negotiations for purchase agreements will become more complex. Both buyers and sellers should understand their rights and responsibilities with regard to real estate transactions before committing to a real estate purchase agreement.
Source: Boston Globe, “Scarcity of homes for sale around Boston sparks bidding wars,” Jenifer B. McKim, March 26, 2013