Ways To Get Your Offer Accepted November 2020
Ways To Get Your Offer Accepted In A Seller's Market November 2020
"Imagine this: You’ve just walked through the front door of a beautiful home, newly listed for sale. The size is perfect, the neighborhood is ideal, and it’s within your price range. There’s just one problem – it’s filled with other potential buyers! They all seem to love it as much as you do, and by the end of the day, multiple offers prove this to be true."
Believe it or not, this is what buying in a seller’s market can be like. These so-called “hot markets” are where housing inventory is low and prices are relatively high. And while these conditions are prime for sellers, they can make the process more challenging for homebuyers.
However, for many, buying a home in these markets is a battle worth fighting for – especially as rent prices continue to climb and interest rates remain near historic lows.
To navigate a seller’s market, you’ll need to beat out the competition. Fortunately, we’ve got some tips to help position yourself for success and find your perfect home.
Buying a home is a two-way transaction. As much as it may feel like it’s all about you, remember that there’s a lot at stake for the seller, too.
Getting pre-approved, or having your lender verify your ability to afford a home loan for a specific amount, lets the seller know you’re qualified—and motivated. It demonstrates financial security, giving the seller confidence that the sale will go smoothly with you as the buyer. The process is different than getting pre-qualified as pre-approval requires documentation and is not based on estimates.
In a seller’s market, a listing today could be a memory tomorrow, which means you can’t always wait for that weekend showing. Try to be flexible and make yourself available for showings as listings become available.
After you’ve seen a home and you’re comfortable moving forward, consider submitting an offer on the spot. Sometimes agents will begin the negotiation process onsite with the buyers stationed outside. This way, the agent can modify the offer if needed to expedite the process.
Place a Fair Bid
No one wants to pay more than necessary for a new home. But you also don’t want to risk losing the right house by submitting a lowball offer. Work with your real estate agent and research comparable home sale prices in the area to determine an offer strategy. At the end of the day, you have to be comfortable paying for what you offer.
This is not the market for making low offers and hoping someone will bite. You will have to make your offer strong enough to beat out a multiple-bid situation. If you want the house, you’re likely going to have to go above the asking price.
Don’t allow the thought of offering over the asking price stress you out. Sometimes, you only need to offer $3,000 – $5,000 more to achieve the effect you’re going for. Doing this will show the seller that you’re serious about buying the home, and that you want them to consider you as a potential buyer.
Making an offer above the asking price won’t end up costing you much in the long run. What you put down and what you pay monthly on your mortgage will only change significantly if you offer an unrealistic amount above asking. Keeping your offer aligned to the home’s value, while still above the asking price, will help you secure the home you’re interested in.
Make Your Offer As Clean As Possible
A clean offer should not be contingent on the sale of another property or have other financial constraints. It should also be free of seller concessions, which are things that a buyer asks for outside of the offer price, such as help with closing costs.
“I tell my clients that the traditional contingencies are like a deck of cards you hold to your chest for protection: loan, appraisal, inspection are the main ones. As you lay them on the table, you give them up, which makes your offer more appealing to a seller because you have less opportunity to back out of a contract that you write.”
Even if you don’t add contingencies to your offer, there are still ways to protect your interests. For example, you can get your loan fully underwritten. This means that you will complete the entire loan process with your lender before making an offer on a home. Then when you put an offer in you can confidently put down your loan contingency with little to no risk.
Also, consider giving up your inspection contingency. If the seller has provided inspection reports from reputable companies, then you can do this with little risk involved.
Waive The Appraisal Contingency
“An appraisal contingency can be given up as well – but, this poses the most risk unless you have enough cash to cover any potential shortfall between offered price and appraised price.”
This is a huge one in neighborhoods that are experiencing a resurgence in property values or gained interest. An offer indicating your intention to bring money to the table if the home doesn’t appraise will definitely set you apart from the others. Just make sure you are in a strong financial position to take this risk.
Make A Larger Down Payment In Your Loan Program
No matter what type of loan you choose, offering to pay more down is another sign of good faith to your seller. As we’ve indicated with several of the previous points, anytime you can showcase that you’re in a good financial position, you should do so. This situation is no exception to that rule. By putting down a larger down payment than you have to, you send the message that you’re serious about the purchase and capable of meeting all financial obligations.
Write A Personal Letter To The Seller
A simple way to increase your odds of getting your offer accepted is to write a personal letter to the seller. “While some sellers only care about the price, others are emotionally attached to their homes and want to make sure it will be in good hands.” If
Ifa seller has lived in their home for many years, it may put them at ease to know someone who cares is moving in.
“By including a letter that tells the seller a little bit about yourself, why you love the house, and why you want to make it your home, you can make the difference in close bidding situations”
Decide Where You Can Compromise
Everyone has an image of the perfect, move-in ready home. Although when you’re searching in a hot market, it may not be easy to find. Do some soul searching and consider what matters most to you in a new home. Is it the size? The style? The location?
Once you’ve figured out your must-haves, then consider making compromises on those less-important features.
You may encounter some stiff competition out there. Above all else, stay focused on your goal, and try to be patient. The right home is out there. Equip yourself with these tips and soon you’ll be the one packing moving boxes!
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