The housing market is hot, and while that may be great news for those listing their homes, for buyers, the frustration is real. Week after week, house after house, they’ve grown accustomed to the phrase…”we’re now in multiple offers.” A great looking, well-cared-for and most importantly, well-priced house, is creating quite the frenzy for those out searching for their next home in this low inventory seller’s market.
When demand outweighs supply, there are a few things you can do to get ahead in this competitive market:
- FIND A WELL QUALIFIED BUYER’S AGENT: Along with obtaining a strong financing pre-approval, this is the first step in getting closer to the home of your dreams. Ideally, you want an agent who has dealt with multiple offer situations before and knows several strategies to help you win. Overall, it can come down to what you’re willing to pay. As a buyer’s agent, I would never encourage a client to overpay for a home, but I can offer advice to help get you to the “right” price.
- MAKE A STRONG INITIAL OFFER: Yes, we’re starting with the $$$. In most cases, this is what it comes down to. Sellers usually want the best possible price they can get for their home. Still, it doesn’t mean the highest offer will always be the winning offer. Along with the purchase price written in the contract, you can also consider asking your agent to include an escalation. This is an addendum to the contract stating that you will pay a set amount over the highest written offer up to the limit you set.
- HAVE YOUR AGENT ASK ABOUT THE SELLER’S NEEDS: Is there an occupancy time that would work best for them? Do they need a quick close? Ultimately, the offer that best fits the needs of the seller is the offer that will win.
- CONSIDER WAIVING CONTINGENCIES OR KEEP TIME FRAMES SHORT: While I can’t recommend skipping an inspection, some buyers are waiving the inspection as a contingency and accepting the house “as is.” The same goes for the appraisal. There is a concern when a house sells far over listing price that might not appraise. In a multiple offer situation, the buyer could offer to pay the difference between the appraisal value and the purchase price should the appraisal come in lower.If you don’t want to waive the contingencies all together, it can be a good idea to keep the inspection and settlement period as short as reasonably possible
- DON’T ASK FOR EXTRAS: A multiple offer situation is not the time to throw in a lot of extras like closing costs, a home warranty or appliances or furniture. It’s best to keep the contract as clean as possible.
- GET A PLUG FROM YOUR LENDER: Have your mortgage person CALL the agent to tell them how well qualified you are. Even if they just leave a message it can help.
- GIVE IT YOUR BEST EFFORT: As mentioned before, having a strong pre-approval to back your offer can help the seller feel much more confident in your ability to purchase their home. You can also add to the amount of earnest money you would normally offer to show a strong interest and commitment to following through with your offer. If possible, consider a cash offer. While cash isn’t always king, it does make for a very compelling offer and a streamlined purchase process that can be hard to top.
- STAY CALM: It can be easier said than done, but the best advice I can give to my clients is to present the strongest offer they can to help get the house they want at a reasonable price that falls within their budget. While it can be difficult to remaIN unemotional about these decisions, you have to keep it in perspective. Offering more than you’re comfortable with paying or forgoing important contingencies can lead to regret down the road.