Inventory is scarce, new construction is slow, and interest rates are low. All these factors have helped create the seller’s market we’ve seen over the last year. If you’re a buyer in this climate, you’ve likely found the competition is daunting. Sellers don’t just have multiple offers, they have offers from cash buyers who have enough money to pay for their home outright.
How to Make Your Offers Competitive
Trying to purchase a home right now may feel overwhelming, but there are ways to make your offers stand above the rest. Read on for seven strategies you can use to make your offers the most appealing in this market.
1. Get Pre-Approved, Not Just Pre-Qualified
Before you begin looking at homes, take the time to get pre-approved, and show you’re a serious buyer. Being pre-approved means you can avoid having a more prepared buyer swoop in and take the home you want.
2. Be Willing to Waive Contingencies
Consider which standard contingencies you’d be willing to give up. For example, some homes are appraising for less than buyers are willing to pay, and comps have not caught up with the market to change this. In light of this and as a buyer, consider whether you are willing to waive the appraisal contingency and if you’ll have enough cash to close the gap between what the lender will loan and what you’d be willing to pay.
3. Have More Cash & Be Able to Prove It
As mentioned above, in order to waive some contingencies and make your offers more attractive, you’ll need cash to cover what the lender will not. Sellers are drawn to all cash offers, and lenders value high down payments. Save cash and have your financial records ready to prove you have it.
4. Make Your First Offer Your Strongest One
Get right to the point with your offer. You don’t want to regret losing out to another buyer who offered the same terms you would but did so more quickly.
5. Match the Seller’s Desired Timeline
Sellers may want to close quickly or request a rent-back after the sale. Find out what the sellers want with regard to the timeline and assure them you’ll provide it.
6. Offer Earnest Money
Show you’re serious about buying the home by putting up a significant amount of earnest money. This amount can be 1% to 10% of the purchase price depending on interest in the home. It represents your good faith to buy a home, and it will be returned to you if the seller cancels the deal.
7. Work With The Best Real Estate Professionals
A good real estate agent should have a solid understanding of the market, and be quick and clear in their communication. Don’t just go with the first recommendation you get or the lowest fees. This is your advocate and representative, so you need to choose them carefully. An experienced agent can help you craft the best offer possible.
We Can Help You Compete
The deeply held values of The Reed Team include honesty, integrity, hard work & putting clients’ interests ahead of their own. We represent some of the most experienced agents in the market and have a reliable network of professionals in the industry we can connect you with.
If you’re considering buying a home, reach out to us here or contact us at 949-392-6400. We can help you create your best offer quickly, and get you in the home you’re looking for even in this competitive market.