As a homebuyer, you’ll face one of three types of real estate markets as you embark on home ownership: buyers’, sellers’ and balanced. The type of offer you’ll want to submit is highly dependent on the current market.
When the market is searing hot like ours is now with few homes for sale, low interest rates and lots of buyer competition, this is undoubtedly a seller’s market.
“Highest and best” is a term you’ll often hear during an overheated seller’s market, when there are few homes available to lots of buyers. It’s the strongest offer one can submit on a home for sale.
In this market, prices typically tend to escalate quickly (the old supply-and-demand economic model at work) and bidding on homes sometimes becomes frenzied.
Sometimes there will be investors – those guys and gals that come in waving lots of cash and offering enticing promises to close quickly.
Although it’s not impossible to win against these cash buyers, it is challenging. The most important thing to remember is unfortunately the seller is in charge. Because of this, don’t plan on receiving any concessions from the seller. In fact, don’t ask for them. If you do, and there is a clean cash offer, you will lose.
For some buyers it may be necessary to experience losing a few before you win, the experience of those losses will motivate you to make an offer that can compete. When your ready to make that winning offer here are some suggestions.
To beef up your offer, consider doing the following:
- Go through the offer with your agent and look for ways to shorten time limits – for example, pre-schedule the home inspection and offer to have the home inspection complete within one week.
- Ask your lender to call the listing agent and convey your qualifications and assure them a smooth closing.
- Skip asking for seller concessions. If you love the home, consider if that carpet credit for $1000 is really worth losing the home over.
- Ask your agent to communicate with the seller regarding their needs after the sale. Do they need time after closing to stay in the home to complete their next home purchase? If so, offer to let them stay rent free in the home for 1 week or even a month. This could be enough to seal the deal for some sellers.
- Consider shopping for homes priced under your maximum loan limit to give yourself more money to use as seller incentives – such as the aforementioned rent free time to the sellers.
- Lastly, are you searching for the same totally stylish home as everyone else? Consider homes with the right layout but just needing cosmetic updates. Ask your agent for contractor resources and pricing on renovating.
These are just a few of the great ways I’ve helped buyers win the offer battle. It’s a tough market and having an experienced buyers agent assisting you along the way will empower you. So what are you waiting for, reach out, let’s get started!