Have you found a house you love and are ready to purchase the perfect home for your family? That’s great! But first, it’s important to take some time to understand the state of the market and how it can affect your buying process and strategy.
Due to the overwhelming growth both our state and area have been experiencing over the last few years, the real estate market is a truly what’s known as a “seller’s market.” In short, this means that there are more people trying to buy than there are sell. The demand to purchase homes is very high, which gives the seller more of an advantage over the buyer, because buyers are plentiful, and competition is stiff. Often times, this means simply offering asking price might not be enough to secure your dream home. Today, we’re going to talk about some of the different approaches you and your real estate agent can take to up the chances of your bid being accepted.
Make a “clean” offer.
This means that your offer should have no other provisions or concessions tied to it. Instead, ensure you’re comfortable purchasing the home as is. Odds are, there will be a multitude of other offers in the mix with yours, so making it as straight forward and appealing as possible is important. We suggest not asking for anything from the seller- don’t ask them to fix anything, or throw anything in. What may seem like an innocent suggestion may what causes the seller to choose another offer over yours. Even going so far as to give up traditional contingencies such as loans, appraisals (this is the most risky contingency to give up) and inspections will be a fantastic way make your offer more attractive to sellers. Of course, always ensure you have the financial means to take those risks!
Offer above the asking price.
It’s simple, if you make a high enough offer to undercut your competition, the odds of walking away with the house is much higher! Making your offer as competitive as possible is always a great tactic, but ensure you talk with your realtor to make sure you’re not offering more than the house is truly worth.
Sometimes, even offering just 2,000 or 3,000 more is all you need to stand out against the other bids.
Opt for an escalation clause.
An escalation clause tells the buyer that if another bid comes in at a higher price than your initial offer, that you will increase your bid to exceed said offer up to a maximum price.
However, it is important to note that the seller may choose to come back with a counteroffer, rather than accepting your escalation clause offer.
In order to do add an escalation clause, be sure and talk with your lawyer. They will write it into your contract to ensure it is legally sound.
Become a cash buyer.
Offering your bid in cash is attractive to sellers, and is a great way to stand out against other bids, even those that are higher. Many sellers prefer cash offers, as it allows them to make a majority of the financial decisions, rather than the bank. In addition, the buyer has more control over the closing process.
All in all, a cash offer signifies to the seller that the buyer is serious about their offer, and has the financial means to close on said home. To them, this means that the first offer they accept is less likely to walk away before closing.
As always, we recommend working with a professional real estate agent to come up with a plan to set you apart from other buyers, while still working within your budget and the current state of the market. Still in need of a realtor? Give us a call and we can start the process of finding (and successfully purchasing) the home of your dreams!