Buying an existing home in today’s market is challenging and stressful. In the current seller’s market there are fewer properties available then there are buyers. Surviving (successfully buying) in this market requires preparation and strategy.
Preparation: Time is of the essence. Multiple offers have become the standard in the current market which means that when you find the home you want immediate action is needed. When crafting the offer consider these 5 tips.
- Price. Start at list price. You may need to offer more than the asking price for your offer to be accepted. Consult with your Sales Associate and determine list prices versus sold price trends in the neighborhood.
- Earnest Money. Webster defines earnest as “serious in intention, purpose, or effort”. With that understanding it is important that the amount of earnest money in the contract sends a signal to the Seller. If this is the house you want don’t skimp here. You should consider a sizable earnest money deposit to tell the Seller that your intentions are serious.
- Don’t Request Favors. In this market it’s not wise to ask the seller to throw anything in, so don’t even think about asking the seller to leave the new stainless refrigerator or the pool furniture. Every favor has dollar signs attached and reduces the sellers profit and is unlikely to be viewed favorably.
- Seller Leaseback. Selling a home in today’s market can be stressful for the seller as the likelihood exists that they may be required to move quickly. You can ease that stress for the seller by offering them a few extra days to move out. The seller will appreciate the offer and may view your offer more favorably.
- Pre-Approval and Proof of Funds. If you have not been pre-approved by your lender (not pre-qualified) don’t even make an offer. Sellers are unwilling to risk accepting an offer that comes with the risk of the buyer being turned down for financing. With so many buyers vying for the same property why should they? Ensure that you have provided everything to you lender that they require for approval and that the only missing ingredient is finding the home. Additionally, showing the seller that you have funds in the bank adequate to cover your down payment will increase their confidence in your offer.
Strategy: Build rapport with the Listing Agent. Imagine the seller receiving two identical offers and contemplating how to proceed, naturally they will look for advice and counsel from their sales associate. This happens frequently in multiple offer situations so your agent should make every effort create great rapport with the listing agent. Consider:
- Seller Needs. Before crafting an offer your agent should discuss what conditions are important to the contract and what the seller will be more likely to accept. Since the listing agent has the best interest of the seller in mind and wants to present the best offer possible to them this is easy information to ascertain.
- Counter Quickly. In a normal market when negotiating and the seller counters the initial offer the changes are sent to their buyer’s agent to present to their clients to either sign or counter. In today’s fast moving market time is of the essence so if the listing agent communicates needed changes that the seller will accept the buyer’s agent should immediate revise the contact and returns it immediately for the seller to sign. Any wasted time opens the window to another offer coming into play and that is not in your best interests.
Putting these Tips & Strategies into place will greatly improve the chances of succeeding in this seller’s market.
Terry Roberts, Owner/Broker