Lake Front Homes are in High Demand!
It’s not easy to buy a lake house right now! The demand is high for lakefront properties resulting in steep competition, offers over asking price, short time frames and frenzied buyer behavior. Lake House Livin’ has eight tips for buying a house in a hot market aimed at helping you to not make a purchase mistake. While we can’t guarantee you’ll beat out your competition, using our tips will make you a better prepared and more nimble competitor!
How Did We Get Here?
The hot real estate market has been building steam since March, 2020 when the pandemic started. Living in crowded pandemic prone cities became less appealing. Consequently, remote properties became an attractive alternative. Plus, as remote working has gained acceptance and proved its worth, many more people can now consider a rural lake home as a full-time residence. Low mortgage rates are also fueling demand. As a result, buying a lake home is highly competitive and prices continue to rise.
Lakefront Homes: Eight Tips for Buying a House
How do you successfully maneuver your house shopping in this environment? The short answer is ‘be prepared.’ If you can learn ahead of time the value of properties in an area, target healthy lakes, know your financial limits and be ready to move quickly you’ll have a better chance of winning the home of your dreams!
Study the Market and Lakes Ahead of Time
1. Understand the real estate pricing structure in the lake communities you’re considering.
Property conditions such as amount of lake frontage, lake size, lot acreage, lake water quality, house age and condition, number of baths and bedrooms, and proximity to amenities all contribute to the value of a property. Price per square foot is one reflection of a property’s value and is easy to calculate and compare. Typically you’ll see a range of price per square foot values in a location. Study the listings to pick up on price per square foot trends from recently sold listings from popular real estates sites. If sold data isn’t published, ask your realtor for sold property comps in the area to understand value.
2. Know ahead of time what lake recreational features you plan to enjoy so you focus on lakes that meet your needs.
Lakes have different chemistries and features that make them better for some recreational activities over others. For example, a clear lake with a sand bottom is preferable for swimming and beach sitting. If fishing is a key interest, a weedier lake would be preferable. Small lakes can have more restrictive boating rules that don’t allow for water skiing. Make a list of the lakes that meet your needs and focus on them.
Know Your Limits
3. Be clear on how much money you can afford to spend on your lake property. If multiple bids are expected for a property, make your strongest offer right away.
Move quickly as you put your best offer forward. Cash is still king and there are cash buyers are out there. If you are able to make a cash offer, you’re in a strong position in hot markets with escalating prices. However, as home prices continue to rise, you don’t want to pay too much for a home. In hot markets, appraisers find it harder to validate buyers’ high offers. For those who can’t make a cash offer, your realtor may have insights into what’s important to the seller that you can leverage. Also, you can take a second look at some of the less hot properties on the market.
4. Expect to make an offer over asking price for those really hot properties.
Understand ahead of time what the top price is that you’re willing to pay for a property. Being able to get your offer in front of the seller fast is an advantage. It also allows you to set boundaries in the heat of a bidding. You’ll save time and reduce your frustration if your clear on where to draw the line.
Expect the Unexpected
5. Don’t be shocked if there’s personal property for sale or if the household items’ value has been added into the price of a house.
Some homeowners simply want to walk away from the home’s furnishings and household goods. You’ll find that they’ve usually taken the things they want and need. The balance of the items are left for the buyer to use or dispose of. For first time lake house buyers, this can be a bonus if the items are in good shape. Determine what condition the items are in and how they are to be valued in your offer. This is an issue that a good realtor can help you with. Special note: You may find other things “for sale” as well such as boats, docks, propane tanks, boat lifts and even antiques.
Be Ready to Move
6. If possible, bring along a handy man or inspector with you at the property showing. This can save you critical time as you ponder all the terms of your offer, especially if you there’s pressure to skip inspections.
You’ll have a big jump ahead of your competition if you can eliminate purchase contingencies. Clearly, fewer contingencies will elevate your offer. Also, fewer contingencies speed up closing time and eliminate risks for sellers. If a handyman can evaluate key systems during a showing, you may be able to eliminate or greatly reduce the things that need inspection. Consequently, you have a more competitive offer!
7. Quickly submit an offer if you find an attractive property.
Sellers are generally attracted to limited risk and a fast closing date. A well priced and quickly submitted offer with fewer contingencies and a 30 day closing will help to put you at the top of the pile of offers.
Final Special Tip
8. Remember that lake front home sellers are more likely to be emotional about the sale of the family’s lake house.
While some realtors scoff at this, consider including a letter to the seller from your family with your offer. Share with them why your family wants their house. Lakefront homes are often ‘in the family’ for a while. Consequently, many lakefront owners are deeply connected with the house and care about the lake’s health. Be sure to include a paragraph about how your family looks forward to caring for the home and keeping the lake healthy for future generations. This can make a difference when the seller has to make a final choice.
Lake House Livin’ hopes these eight tips for buying a house help you find and purchase the lakefront house of your dreams. Be sure that you are working with a competent realtor who’s representing you and not the seller. Be prepared to either walk away and/or loose a few competitions. Finally, while hot real estate markets are tough to navigate they don’t last forever. Interest rates are already climbing which should begin to cool the market.
Want Help On Property Research?
We hope our tips for buying a house in a hot market are helpful. Check out Lake House Livin’s LAKEFRONT PROPERTY SEARCH WORKSHEET that helps you organize the details discussed above on a single page. You can prepare similar pages for different communities you’re targeting for your potential lake house purchase. Good Luck!!
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