The dramatic rise in median home prices in New York City and other busy real estate markets from pre-pandemic levels, and the intense competition for desirable properties, has driven buyers throughout the country to pursue a range of innovative solutions they might never have considered four or five years ago, brokers and real estate lawyers have told The Epoch Times.

But that doesn’t mean that buyers elsewhere have it easy. Throughout the rest of the country, they are looking long and hard for affordable deals, with average home prices at $412,300.

Mark Scheier, co-founder of the Acton, Massachusetts-based real estate law firm Scheier Katin & Epsteinthat, said recent analyses that describe the current market as a buyer’s market—in which inventory volume and a relatively low bar for access favor buyers over sellers—are mistaken.

“I’m not experiencing a buyer’s market at all; I’m still experiencing a seller’s market here,” he told The Epoch Times.

Until recently, about 10 percent of the deals that Scheier brokered for clients were all-cash deals, while the rest involved some mixture of financing—usually bank loans—and cash.

“Almost 40 percent of my deals are cash deals, which was never the case before,” Scheier said. “People are doing everything they can, breaking into their retirement money, pooling all their assets together, to try to make cash deals.”

With prices rising so rapidly, one factor is fear of missing out (FOMO)—an acute sense on the part of many buyers that if they don’t get in now, they will face an even more fiercely competitive market in the near future, he stated.

A corollary to this perception, he said, is the need to acquire properties whose value is increasing dramatically and take advantage of the price appreciation while they still can.

“I’ve been practicing for 51 years, and I’ve seen all the ups and downs, and right now, I think there’s a lot of FOMO going on,” Scheier said.

“The train is leaving without them, and if they don’t rush to get on the train, they’re going to lose out on that appreciation. People are feeling that way, so they’re moving ahead, they’re jumping off the cliff.”

Many people in the market are coming to realize that mortgage rates are unlikely to fall back to 2.5 percent in the foreseeable future, and they will have to accept rates of 6.5 to 7.0 percent, which might have previously put them off of trying to close a deal, Scheier noted.

However, the historically high prices and the competition require a diversification of strategy that brokers say they have rarely seen before.

The lawsuit took issue with agents’ use of the association’s Multiple Listing Service (MLS) and the practice of charging 6 percent commissions, often split evenly between sellers’ and buyers’ brokers, in property sales.

Michael Downer, a broker at Coldwell Banker Realty in Naples, Florida, said the settlement means that buyers’ brokers can no longer pretend to their clients that they are acting pro bono while, in fact, automatically getting half of the 6 percent commission paid to sellers’ brokers at closing.

Buy-side brokers will have to be more transparent about what they are actually doing and what compensation they should rightfully receive for their role in a deal.

At the same time, others criticized the outcome on the grounds that purchasers who cease to find a buy-side broker using the MLS will begin working directly with sellers’ brokers, which poses a conflict of interest, given those brokers’ preexisting relationships with their own clients.

“From a legal perspective, I don’t know that there has been that significant of a change in laws. Obviously, there was the recent NAR settlement, but it’s just with respect to the use of the MLS,” Zachary Schorr, a real estate lawyer and partner of the Los Angeles-based firm Schorr Law, told The Epoch Times.

In this highly competitive environment, some buyers are even going so far as to waive the loan and appraisal contingencies that many have relied upon in the past to guarantee that they can get their deposit back if the mortgage financing they seek doesn’t get approved, or if the appraisal of the property turns up unexpected issues, Schorr said.

It can be a big mistake to waive these things or skirt due diligence—which may lead to serious problems after a sale, and cases of buyer’s remorse. Yet, some people these days are acutely conscious of the disadvantage they face with respect to other buyers who are able to present themselves to sellers as unencumbered by any need to secure financing.

“It’s a more strategic way to do it if you’re in the all-cash market, or you’ll be beaten out by all-cash,” Schorr said.

“This is a higher-end market, too. If you’re way above the median price, there are more all-cash buyers.”

Lara Mizrack, a broker at Brown Harris Stevens in New York City, described many buyers’ unease as largely a function of high interest rates, the upcoming election, and international uncertainty. Mizrack acknowledged the distinct advantage that cash buyers hold in the current market.

“An all-cash deal has a faster application process, easier closing, and a seller does not have concerns about bank rejections,” she said.

Finding prices in the range they can afford may sometimes require buyers to look beyond the area where they live and to consider, for instance, a townhouse or condo unit rather than a single-family home, Ameer told The Epoch Times.

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Another option is to buy a property in order to rent it out and use the revenue from the rental to pay off the mortgage and increase their share in the equity of the property in question, she said.

“There are affordable opportunities in virtually every city and state; you just have to know where to look. Smaller towns near colleges and universities are often promising opportunities,” Ameer stated.

“Buyers should also work with a lender well-versed in low- to no-downpayment loans, as well as first-time homebuyer programs and creative lending options that can help them access financing.”

Ameer noted that one Southern California lender she works with makes use of a program through which buyers don’t need to put any money down on a first mortgage and can take out a second mortgage using 3.5 percent in gift funds directly from the lender. The buyer must have funds to cover the closing costs.

The total paid at closing runs to about 3 to 4 percent of the purchase price, she said. Buyers who don’t have the means even to cover that expense at closing can request a cost credit from the seller.

Ameer also pointed to Federal Housing Administration (FHA) loan programs that require 3.5 percent down, and conventional loan programs with low down payments that cover anywhere from 5 percent to 100 percent of the total purchase price.

Yet another option for buyers who don’t have deep pockets is to seek out a property in a state of disrepair, whether that means something as serious as a missing roof or as cosmetic as broken air conditioning, and to apply for a renovation loan, Ameer said.

Such properties often go overlooked because many people are wary of having to do renovations or their instinct is to not trust a home that has been on the market for a while, she added.

Ameer called renovation loans, available through both the FHA and the Veterans Benefits Administration (VA), a little-known tool.

With a renovation loan, buyers can get in on a deal and put down as little as 3.5 percent, she said. VA loans can offer up to 100 percent financing.

However, the lender will need to find through an appraisal that the after-repair valu will be higher than the sale price.

If the buyer knows which contractor he or she wishes to use, the contractor can apply directly to the lender for approval. In this scenario, the contractor will receive payment based on having completed phases of the job, subject to approval from a third-party inspector hired by the lender.

“This provides even more protection for the buyer versus buying a property that needs work and a buyer giving a contractor a lump sum of money to do the renovations with no oversight,"Ameer said.

Other buyers look to purchase lots and then construct properties on their own terms and schedules, but this also comes with risk.

Scott Martin, an asset manager who decided to move from New York City to Maine in 2021, described the extensive mismatches of supply and demand that he and others who had purchased lots in the town of Sebago came up against.

Though the lingering pandemic may have played some role, local contractors may simply not have had enough resources for the number of would-be homeowners, he said.

“Everything took three times longer because none of the materials were available when they were needed. And by the time the materials showed up, the contractors had already released their teams to other projects,” Martin told The Epoch Times.

“Some houses couldn’t get panels or framing on schedule, so they made no progress, wasting weeks of good weather,” he said.

“Our builder couldn’t source siding through legitimate channels. Some ended up making weird substitutions, wedging an off-plan panel into place or skipping parts of the finish in order to move ahead. Corners were cut, and it will show up in the years to come.”

Nevertheless, all-cash buyers in the Brooklyn borough of New York and other popular markets hold a distinct advantage over those who require some level of financing, he said.

One strategy that Whitman and his colleagues recommend to some of their clients is to search out properties that have been on the market a bit longer, he said. Often, sellers will be eager to get the properties off their hands, and not simply because of the condition they are in. They had simply expected to have made a sale already.

“Some buyers are afraid—if it’s been sitting there, what’s wrong with it? The answer is, typically, it’s the price, it’s not the state of the apartment,” Whitman observed.

“Those sellers are usually not eager to negotiate. If you start searching and looking at places that have been sitting for four to 12 months—that’s typically the range I would tell somebody—this is the time you can try the seller’s hand and see how motivated they are to get the deal done.”

Whitman and his colleagues also work with sellers, he said, and they counsel sellers not to be taken aback if an offer comes in significantly lower than expected.

“We’re representing sellers, and we’re preparing them ahead of time, telling them people are starting low with offers and not to be offended,“ Whitman said. ”They should respond to all offers. The buyer’s testing the owner, and you can test them back.”

From the buyer’s standpoint, the longer a property has sat on the market without selling, the higher the prospect for getting a better price, he said.

“The caveat is, as long as there’s an offer on the table that is low, the seller has leverage, because now, every time someone comes to see the property and likes it, we’re going to say, there’s an offer and it’s not yet accepted. It creates a sense of urgency for new potential buyers,” Whitman stated.

The NAR did not respond by publication time to a request for comment.