Dear Friends, Clients and Fellow Associates~
We missed the bullet! Hilton Head Island is 97% developed with a limited and finite resource of land and we did not have the investors and flippers buy our real estate. Of course, the beauty of our market right now is we have a surplus of inventory on Hilton Head Island, but this will change faster than these other areas. Hilton Head did not have much land or huge coastlines to develop. As a potential buyer getting ready to purchase Hilton Head Property it is very important to know the rules associated with our market. Therefore we have put together a list of rules for buyers below for your review.
Rules for Buyers on Hilton Head Island
Rule #1 – Know the Market
Buyers need to know the market trends of the area they are buying. Some of the things they should look at are days on the market, number of listing in their price range, selling price per square footage by neighborhood, percentage of listing to selling price and of course absorption levels. Each segment of our market is different and cannot be negotiated the same way. The Island market simply does not behave like other markets because of its geographical size and the quirkiness of being a blend of residential and resort real estate. In fact, it has been said that the Hilton Head Market is more insulated than other places and is one of the last one into a recession and one of the first ones out.
Buyers Rules for Buying Property on Hilton Head Island(or anywhere else)
Rule #2 – Choose only ONE Agent
Choose to work with only one agent that you know and trust. Of course, you can hire the agent as your “exclusive buyers agent”, but if you are not ready to buy, you do not need to hire an agent just yet. Here are some other helpful hints in working with agents: 1. Communicate frequently with your agent 2. Let other agents know who you are working with when you attend open houses 3. Do not call the listing agent if you have a buyers agent, let your buyers agent do their job 4. Keep in mind agents are commission only and get paid only when they find the right property that suits your needs. Tell your agent your time frame and turn them lose!
Rule #3 – Get ready to BUY.
There are three very important parts of purchase that you should be ready for before you find the perfect property. These include 1. Pre Strategy Session. The benefits of being pre-qualified is that you can save thousands in negotiation, but more importantly lower priced no financing contingency contracts may be considered and chosen because of the financial situations now. If you are pre-qualified you can have the confidence to write a no financing contingency contract. 2. Have your checkbook ready. Typically earnest money in our area ranges from 5-10% of the purchase price. 3. Credit scores matter right now and you should know yours. If you get pre-qualified, the lender will take care of this for you and advise you.
Rule #4 – Take the Eight Hour Test
If you make the decision to purchase and cannot sleep a good eight hours the night before you meet with your agent, it may not be the right time to buy. My financial strategist always told me this before I went ahead on some of my bigger purchases. This simple rule will keep you from making the wrong decision. If you sleep great and are relaxed in the morning, it is OK to go ahead and jump in!
Rule #5 – Prepare the offer Properly
Buyers have the potential of losing their dream property in negotiations. Just the other day a buyer was negotiating their dream home on the Island and even had a higher offer but they lost their chance to buy the home. Any time there are contingencies, all parties must sign off on them for the contract to be valid. During this stage the seller is still free to entertain other offers. This is where the problems arise as other buyers can move in without giving you the chance to raise your offering price. If you do your home-work, write in fewer contingencies and keep the negotiations moving the chances of winning are better.
Rule #6 – Recognize Real Estate on an Island is Seasonal
If you are buying property on Hilton Head, it is important to know which season you are in during negotiation. Of course, during the busier months if you find a property you will want to negotiate faster and get a signed contract before someone else comes in and makes an offer. In the off season, you may move a bit slower unless it is an especially hot property. Moving the negotiation process along is very important once the first offer is submitted. Don’t sit back and relax until the contract is signed by all parties and delivered. When it is done, it is time for a victory dance!
Rule #7 - Don’t LOWBALL realistic prices
You will not get a property that is priced correctly at a low ball price. Realistic sellers are getting close to their asking price in this market. In fact, the average list to sell price for our properties has been 93% of asking price for homes and villas. If you are looking to get a property for pennies on the dollar perhaps you should look in other places(click on this link). Remember, it is not how much you pay it is how much you get.
Rule #8 – Don’t ever give up!
Buyers are giving up to quickly. If you make an offer and it is countered, do not give up. I just went through a negotiation with my buyer and at least 2 times they were ready to give up and go back out shopping for a different home. It came down to a $5,000 decision in the very end, and fortunately they stayed in the game and got the best home, in the best neighborhood at the best price. Do not draw a line in the sand without being prepared to step over it and redraw it again especially in this market.
Rule #9 – Enjoy the Journey!
This is important. Buying real estate should be fun. The pressure that you feel to purchase is all internal and never should it be external. If you want it, go ahead and get it. However, do not let an agent, a seller or a buyer put pressure on you to buy(only your spouse is allowed to do this). Buyers’ need to know that the right property is available in today’s market and they should enjoy the journey and find it. Not all markets are like this. Have fun and go out and find your personal paradise with an agent that you know and trust!
As a buyer you have the power of all three including great location, great condition and incredible value. One or two of these will disappear as the market stabilizes. If you do decide to play the game, we hope the rules above are helpful. Of course, feel free to contact us anytime to get you started in researching some market areas of choice. We look forward to seeing you achieve your dream.
Enjoying fall on an Island,
Robbie Bunting & Jane Hyers