HGTV's Lauren Risley Offers Advice for How to Navigate Tough Home-Buying Situations

HGTV fans are in for a treat with the network's latest show, Call the Closer. With St. Louis-based real estate agent Lauren Risley at its helm, the show centers on helping hopeful buyers find their dream homes.

As ideal as it would be to find a ready-made home, Risley, who is also a renovation expert, reminds buyers of a home's potential by introducing them to renovation ideas, ultimately helping them close the deal.

Since there are only so many episodes set to air in the coming weeks, we sat down with Risley for everything there is to know about buying in today's market. Keep reading to uncover her top tips for home buyers.

Today's Market

Buying a home has always been a somewhat challenging process, as it requires narrowing down your preferences, figuring out your non-negotiable home elements, getting financed, and then finding a house that checks all of those boxes.

Nowadays, it's even more challenging thanks to the housing boom brought on largely by the pandemic. After all, with more time spent at home, folks everywhere are placing more value on building the home sanctuary of their dreams. And, as a result, Risley says that the reality of the market right now is that inventory is super low. "I would say, in St. Louis—this is my own opinion, not a St. Louis statistic; but I would say based on our buyers—that there's probably one house for every eight buyers," she reveals. "So there's just not a lot of inventory."

Part of why inventory is so low is not only because of pandemic-driven intrigue but because fixed mortgage rates (AKA the amount of interest you pay on a 30-year-loan) have dropped significantly. According to a recent real estate report by CNBC, "at the start of the pandemic in March 2020, the 30-year fixed-rate mortgage rate sat at 3.45%. By July of this year, that number had dropped to 2.87%." This is noteworthy because a lower fixed rate means less interest paid over the duration of the loan.

Between low fixed rates and subsequently low inventory, Risley says that buyers are having to get more creative than ever with their offers.

What Makes a Creative Offer

Considering the low inventory of today's market, Risley says that many sellers are getting five to ten offers almost immediately, and often over the asking price. In this scenario, she says that sellers are going to look for the cleanest offer. With this in mind, Risley says that it's imperative for buyers to have really strong financing. What's not imperative, however, is dropping your standards in an effort to speed up the process.

"I've seen offers on the seller's side where people have waived inspections and I just don't think that's smart," she says. "If you're buying a $400,000 or $500,000 house, you'd be silly not to do your due diligence on that. So we don't recommend that."

What Risley and her team do recommend? Getting pre-qualified with a local lender in an effort to close in two weeks—a timeframe that she says is "really pretty quick" in the world of real estate.

Creative offers don't solely mean catering to sellers, though. Sometimes, Risley says it's about finding sellers who didn't yet know that they were in the market to sell.

"What my team does a little bit differently is that we find off-market deals," she says. "So if there's a neighborhood that [a client] is really interested in and maybe houses are going on the market and selling day one with 10 offers, we actually—my team and I—go door-to-door and door knock the neighbors and go, 'Hey, did you know that house two down went $30,000 over and they had 10 offers?' And they're like, 'What?' And we're like, 'If you had an offer at this price, would you be open to selling your home?'" Shocking and unconventional as it may seem, Risley reveals that the method works about 20 to 25 percent of the time in today's market.

"We can find our buyers off-market deals just by hustling," she says.

What Not to Do as a Home Buyer

Another important part of homebuying, in Risley's eyes, is not getting hung up on the list price. "That price that sellers list their house at, buyers are so emotionally attached to that number and so what I try to get buyers to do is not look at the list price," she says, admitting that it's easier said than done. "But for example, I had a buyer who went to a house that was listed for $300,000. My buyer was approved for $375,000." in an effort to make a creative, enticing offer, she recommended that her buyer offer $30,000 over ask, as it's still within their approved range. "They were like, absolutely not, I'm not overpaying," she shares. The thing is—and what Risley always reminds her clients— though, is that offering over list doesn't automatically equate to overpaying.

"You're not overpaying; you're going to get an appraisal, and that's going to protect you from over-paying," she assures. What's more, she points out that the list price is an arbitrary number because at the end of the day, a house is worth what the market is willing to pay for it, and the appraisal will protect buyers from overpaying. "So I just always tell people to go in with the strongest offer, because that appraisal is going to come back and the lender will not lend over that appraised value and if the house doesn't appraise, you're allowed to walk away from the contract," she says. "So you do have that safeguard. Either the seller lowers the price or you get to walk away, but it's going to protect you. And that's what I tell people. ‘Hey, our first hurdle is getting the house. There are 10 other people writing an offer, so let's get it first and worry about the other stuff later.'"

It All Comes Down to Perspective

According to Risley, home buying in today's market is all about helping clients look at the process from different angles. When it comes to offering over the listing price, she admits to breaking it down in a way that makes it easier to comprehend."If you're going to live in a house for five years or 10 years, who cares if you pay $20,000 or $30,000 over asking for it because it's only working out to be maybe $20 on your mortgage," she explains. "I always joke with my clients by breaking it down. Like saying, ‘Hey, this is your dream home, is it worth an extra $20 a month? And they're like, ‘Absolutely!' And I'm like, ‘Great, that equates to $30,000 over asking, and then they're like ‘Oh, well then it doesn't seem so bad.'"

Risley says that it's also important to keep perspective on the negotiables and non-negotiables in home-buying. Typically, she says that location, school districts, and living close to a highway if you have a long commute are non-negotiables. Things that can be adjusted are kitchens, bathrooms, flooring, the overall layout of a home, whether or not the back yard is fixed, and other important, but ultimately cosmetic features like that.

"Sometimes I have people say that they have to have a fenced-in yard because they have a dog and I'm like, ‘Could it also be true that we have a yard and then have it fenced for your dog?' And they're like, ‘Oh yeah, that works too,'" she shares to provide an example of the importance of perspective. "Or they say they have to have three bedrooms because, since Covid, they need a home office, but I'm like, ‘Is it also true that if we found a two-bedroom and we could finish the basement or find a loft space or something like that, that could work too? So it's just helping people think outside the box."

Don't Underestimate the Power of Renovation

While Risley excels at helping her clients find homes that they love, she's even better at helping them close the deal by showing them all the ways they can elevate the home—hence the premise of Call the Closer.

"Part of the whole Call the Closer show is that a lot of things that clients butt heads with are the cosmetic things that we can change; things that I can help them do before they even move into the house," she shares.

The beauty of Risley's process is that helping her clients close doesn't always require a $100,000 full-gut reno. For $15,000, Risley says that you can upgrade floors from carpet to hardwood, apply a fresh coat of paint, and switch out all the light fixtures in a home, all of which lend to a jaw-dropping facelift. So, if you find yourself looking to buy, and don't quite have the vision, put your trust in your realtor and remember Risley's words of wisdom in the process.