Its an (Urban) Jungle Out There: How to Buy Smart in the City

Oh, the braggable joys of a prime location. The convenience of being able to walk to get your soy latte. The frustration of multiple bids. The cost. Buying in the city comes with its own set of opportunities and challenges. But you’ll be prepared if you know a few things.
Each Urban Market Is Unique
Ready, set, buy. Be prepared for a high-speed buying process in New York City, Houston, Tx, Washington, D.C., and many other urban areas thanks to steep market competition. Though some smaller cities have more reasonably paced markets, the biggest, hottest real estate markets in our country move like race horses.
For example, one odd practice you often find in urban real estate markets, is listing a property below market value. While that may seem counterintuitive, it goads people into putting down aggressive, and sometimes reckless, offers on a home. It's Best to spot this before you get caught in a bidding war. Every urban market has its own kinks along those lines. Before diving into a high stakes, lightening round of homebuying, make sure you prepare in three ways:
1. Do a deep dive into the market. A qualified real estate agent, like myself can help you understand the potential mistakes you could make, what red flags to look for (like that below-market listing), what fair market value is for homes in the area, and any oddities about the market. For example, in some hot markets, an open house may be the only opportunity to see and make an offer on a home.
2. Get your financials in order. You will be wasting your time if you don’t. You get one shot to make an attractive offer. That means having your mortgage financing all set with a pre-approval (not pre-qualified) letter in hand and verification of your funds. In a high-paced market, sellers won’t even consider an offer without a pre-approval letter. There’s no wiggle room in this.
3. Get a leg up on the competition. One technique in a fast market is to agree to an inspection where you:
Can walk away from the contract if there’s a major issue, like foundation trouble.
Can’t negotiate with the seller over any issues that arise.
This arrangement appeals to sellers because they won’t be hit with thousands of dollars in repairs, and it gives you an advantage in a competitive field. Similarly, if you’re competing against all-cash offers, which don’t require an appraisal, you can waive the appraisal contingency. That means no matter what price the home appraises at, you’re still going to buy. In either case, understand the risks — if the appraisal comes in $10,000 lower than the asking price, for instance, you’ll have to make up the difference; the bank isn’t going to give you more than the appraisal amount. And ideally, hire an agent who knows the city inside and out.
Don't Set Your Heart on Just One Neighborhood. You may love the neighborhood you’re currently renting in, but urban areas have a variety of neighborhoods. If housing inventory is low or too pricey in the ‘hood you’ve set your heart on, you’ll only be in for disappointment after disappointment. Be proactive and expand your search to other neighborhoods that may offer the same amenities, such as walkability (handy tip: Check out the website WalkScore.com to see). Every neighborhood has its own bit of unique character. Go to the neighborhood coffee shops. Walk around. Chat up the mail carrier. Say ‘Hi’ to someone walking their dog or mowing their grass and let them know you’re thinking of moving onto the block. And think about your lifestyle. If biking around is something you want to do, you might be happier in a more residential area of the city, as opposed to a denser part.
How Do You Really Get to Know a Neighborhood? Whether you’re exploring emerging or established neighborhoods, you want the inside track. Here are a few things to consider.
Crime. If it’s a concern, check out sites like CrimeReports, where you can see what types of crime (assault, theft, etc.) have occurred near an address. But don’t freak out based on what you see there. You have to put these stats in perspective. First look at the results where you’re currently living so you have some perspective. A lot of times there’s a decent amount of crime in your own area that you’re totally unaware of. And don't forget, the best thing you can do to experience a neighborhood is to spend time in it. Don’t just drive through. Walk around. At different times of day.
Schools. Check out school ratings. Talk to people, visit the school, check out Facebook groups to what the moms are saying about that school.
With a little research, planning and perseverance, it is possible to find — and buy — your dream home in the city.

Stacey Freed writes about homes, design, remodeling, and construction for online and print national trade and consumer publications, including "Better Homes & Gardens." Previously, she was a senior editor at "Remodeling" magazine.