A lake home seller’s market is simply a matter of economics. Inventory is low and demand is high, leading to some lake homes being on the market for only hours with competitive bidding. Lake property inventory is 14 percent lower than it was a year ago, although mortgage rates remain favorable.
It’s still possible to buy a lake home in a seller’s market, though it’s obviously more difficult than it is in a buyer’s market. Here are some tips to give you the best chance at your dream home:
Get Pre-Approved for a Home Loan
One of the smartest things you can do to ensure your chances of buying the lake home is to apply for a pre-approval on a mortgage. It is required for offer submittal…and if you wait till you find the lake home you want, it’s too late. The home will go to the buyer who was more prepared. Are you a cash buyer? It’s no different here, be sure to have some type of “proof of funds” letter to go with your offer.
Work with a Lakefront Specialty Agent
Why is this important? First, lake homes are different than any other real estate you purchased in the past. You’re not just buying a home, you’re buying a lake. There are dozens of considerations that are unique to lake homes. Our lakefront specialty buyer agents use our 37-item checklist specifically designed for lakefront property to ensure nothing is missed. Secondly, a specialist will also know the lakefront market extremely well. In a sellers’ market, there’s no time to explore lake conditions, aquatic weed count, water quality, shoreline conditions, neighborhood circumstances, etc. You need to know that going in. And most importantly, they are extremely knowledgeable about lake property values…more than any “generalist” Realtor. This is critical so you don’t overpay or undervalue an offer.
Write an offer letter
A lake home seller has a strong emotional connection to their property, it’s not just a “house” to them. A personal letter from your family to theirs, describing why you love their home, will go a long way toward moving your offer to the top of the pile. Be genuine. Be sincere. Be specific. We’ve seen sellers choose these offers even if the price point was lower! Many people ask if videos can be submitted…and although they can, they are tough to get right. Letters are much more effective and full proof.
Add an Escalation Clause
An escalation clause is inserted into your purchase offer for a lake home and is intended to make sure you get the chance to be the highest bidder. This clause states that if the seller receives another offer that is higher than your initial bid, you are willing to increase your offer to a higher price, usually a predetermined amount. But these clauses can be tricky and need to be used with caution…be sure to use a buyer’s agent who is very familiar with the process and risks.
Remember the end goal
It’s easy to get caught up in negotiations, trying to get the best deal, specific contingencies, multiple offer situations, etc. But keep in mind, a couple months from now, none of that matters. The goal is for you to get in your lake home enjoying your cold beverage on your lakeside deck. So be flexible and keep the big picture in mind.
If you’re prepared, patient and work with the right team of specialists, you’re dream lakefront property is not far away! Good luck and let us know if we can help…
Posted by Scott Freerksen “The Lake Guy”