— By Graham Hill
As home prices in Iowa are rising, what can buyers do to make the process of buying a home smoother and easier?
In a competitive market, there are several habits that can increase your chances of having your offer accepted. Real estate agents will tell you: buyers that consider the interests of the other parties in the process get more done, in less time, and increase the likelihood of completing their purchase.
Developing the habits of a good buyer is especially important in a hot market.
Iowa Home Sales Prices Are Heating Up
Looking at data from Realtor.com, across the top 10 biggest cities in Iowa, average listing prices are up 2.0% in the last year alone (based on numbers from April 2024). According to that same data, the average price to buy a home in Des Moines increased from $229,900 in January of this year, to $241,000 in April – an increase of over $11,100 since the beginning of the year. According to real estate company RedFin (April 2024), the median sales price for a home in Des Moines was up 7.7% versus the same time last year.
Sellers are asking for more, and getting more, as they sell their property. While higher average prices put pressure on some buyers to bid higher, offering more money is not the only way to compete in today’s market.
What Can You Do to Be a Better Home Buyer?
For buyers that cannot easily afford to pay more for their next home, becoming a better partner to your agent and the seller provides an additional path to get ahead in the home buying process. Communication, cooperation, and commitment create opportunities to go beyond bidding, to offer more than other buyers with similar budgets.
You can be more effective when you show your agent and the seller that you are prepared and easy to work with at each step of the transaction.
Stages of the Home Buying Process
Most residential home sales in Iowa will proceed through certain predictable steps:
The buyer must determine a budget for the home purchase. They find a local Iowa real estate agent to work with, and establish a healthy working relationship. That buyer will benefit from taking the time to become pre-approved for a loan (if needed). Working together, the buyer and the agent identify a range of homes within the buyer’s budget. They review property online and visit some homes in person. They make an offer to buy the property. The buyer has the home inspected, reviews disclosures, and signs off on contingencies. Finally, they cooperate with the lender, the title company, and the seller in the closing process.
Buyers can create a better experience for everyone involved by remaining committed to the process, and continuing to make an effort to be prepared and considerate of the other parties at each stage of the home buying process.
Below are some examples of how creating a better experience for the agent and the seller can bring you closer to finding the perfect home.
How to Get the Most Out of Your Relationship with Your Agent
If you talk to real estate agents in Iowa, they will tell you stories about clients that were fantastic to work with, and some that made the process more difficult.
Buyer’s agents in real estate tend to want the same basic best practices from their clients: Buyers should be as prepared as possible and communicate about what they want and do not want (providing specific details). They should respond quickly to requests for feedback or required signatures. Buyers should be patient with the natural ups and downs of the transaction; they should be consistent, and come back to the process after any setbacks. A good buyer should be as flexible as possible with the property details that will satisfy their needs, and be respectful of the agent and the seller along the way.
When a home becomes available but the buyer is slow to review the property, to communicate interest to their agent, or adds delays in viewing the property or making an offer, they may lose out to another buyer that can act more quickly. When the agent can see that a buyer is unprepared or slow to communicate, they may prioritize other clients. In the case when the seller needs to be in contract quickly, the agent may not show the property to the buyers at all.
And while we should certainly expect real estate agents to be professional, it is true that when you are a conscientious buyer that is considerate and shows some effort, your agent may be more likely to go the extra mile for you.
Getting Pre-Approved for a Mortgage
Long before contacting the seller about a specific property, a good buyer can begin the process of becoming preapproved for a loan.
Buyers that take the time to apply for a mortgage, complete any steps with the lender to review their finances, and are then specifically preapproved (not just “prequalified”) for a mortgage, have a big head start over other buyers. They have shown some good judgment, and removed a major barrier that can slow down or complicate a sale.
“We had a buyer that wanted a three-bedroom property in Spencer. The seller was motivated to complete the sale quickly. While there was another offer on the property that was higher, our client was pre-approved and could complete the sale faster than the other buyer. The shorter closing time was appealing to the seller, and our client’s offer was accepted.”
— Holly Brink (Managing Broker), Epique Realty
Being able to demonstrate your funding is in order shows preparedness, and helps meet the needs of the seller.
Working Faster Through the Closing Period
After a buyer’s offer is accepted, the seller’s agent will share more details about the property. Typically, the buyer and the mortgage lender will then require a home inspection. The time it takes to schedule that inspection, to prepare the home inspection report, and to respond to the seller with any concerns or requirements is part of the work of completing the sale.
You can be a better buyer as you and your agent communicate with an inspector in advance, and state in your offer that you are ready to proceed immediately after the offer is accepted. The terms you present to the seller can include a promise to remove any contingencies by a certain date, which can make the seller more interested (and confident) in you as a buyer.
“Time is money in the real estate world. While purchase price is usually one of the most major components negotiated, the timing of the closing/possession can be equally if not as important. If a seller is looking to sell quickly, a well-written offer with a quick close will often beat out an equally well-written offer with a longer time frame between an accepted offer and the actual closing. Have your real estate agent ask the listing agent what is the best closing date for the buyer when you’re putting together your offer, and if that works with your schedule, try to come close to their ideal date.”
— Terri Larson (Partner/Associate Broker), Lepic-Kroeger
A skilled agent can ask questions to discover what is important to the seller, and build those terms into the buyer’s offer. That kind of consideration for the seller can both move the sale along faster, and create more willingness to work with you as the buyer.
A fast sale is often a sign that everyone was ready to do their part. The result is less stress for everyone involved.
Soft-Skills in a Real Estate Transaction
An effective buyer will consider the role of each of the parties in a real estate transaction: The buyer, the buyer’s agent, the seller’s agent, and the seller. Each party has a financial stake, but also has various human needs that affect the process. Working to satisfy the interests of your agent and the selling side will help you to be a more effective buyer in a real estate transaction.
Sellers want the best possible price, but may also have unique needs such as a faster closing period, extra time to vacate the property, special requests to keep an appliance or a fixture from the home, etc.
Cash is not the only factor in a transaction. To be a more successful buyer in this market, you can pay attention to the interests of each of the players in your transaction, communicate quickly and clearly, and use some “soft skills” to show more consideration for their perspective.
Learning from All-Cash Buyers
Paying cash for a home is not a practical solution for most home buyers in Iowa. However, all-cash buyers tend to be professional investors, and by understanding how all-cash deals work, you can learn to apply some of the same principles (even when you are financing your home).
Types of all-cash buyers range from “We Buy Homes for Cash” companies to private individuals, buying off-market property from other industry insiders. Those all-cash sales have a few things in common; the buyers are professional, they are prepared, they have excellent relationships with local agents, and are prepared to close quickly – all of which make the process very easy for the seller.
Buyers with more modest budgets can learn from the efficiency and professional habits of cash-offer transactions.
Be More Prepared, Faster, and Easier
A conscientious approach to the needs of the agents and the seller can go a long way to make you a more attractive buyer. By doing more to take care of the other parties in the transaction, you can improve your chances of success – even (and perhaps especially) in Iowa’s most competitive markets.