Typical home financing involves a buyer finding a home and applying for a mortgage, getting…
It’s frustrating when a homeowner declines your offer. Competition for homes is strong here, and you need every advantage you can get to make your home offer stand out.
Buying a home in a seller’s market can be stressful, especially when the market is tight. Keep reading to find useful tips on buying a home in a competitive market.
First Things First
Get your financial affairs in order. Begin by determining your payment strategy. Cash may seem antiquated in our modern technological world, but it’s still king. And it grabs attention. If you can pay outright with cash, that’s even better. If not, consider a large cash down payment or earnest money to show you’re serious. Secure your loan before you even consider making an offer. Making the offer and then being able to close the deal immediately will impress all interested parties.
Fastest Offer Wins
Sometimes, the easiest way to get the home you want is as simple as being the first one to make an offer. Talk to your realtor and find out how to set up automatic alerts so that you know as soon as a home is hitting the market. Your realtor may also have inside tips on homes that haven’t yet been listed. Don’t waste time; as soon as you see a home you want, make an offer.
Make It Your Best
Don’t be shy! If you really want a home, come out strong on your first offer. Consider the list price, and if reasonable, offer a little more. You’re trying to get the owner’s attention when buying a house in a tight market, and if your numbers are bigger than the competition, you’ve tackled a big hurdle. You don’t have to offer much more, even a thousand dollars more can make your offer stand out.
Offer More Earnest Money
As previously noted, you’re trying to get the seller’s attention. Offering a big earnest money deposit tells the owner and the selling realtor that you’re serious about buying the house. Consult with your own realtor about how much, but it should be as substantial a deposit as you can afford. Remember when you’re putting down earnest money that you can easily lose it if the deal falls through. Be confident that you can close the deal before offering any earnest money.
Make a Clean Offer
Submitting an attention-grabbing offer when buying a home doesn’t help you if your offer is missing information. Buyers receive incomplete offers every day. Work with your realtor to make sure nothing is missing. Missing disclosures, earnest money, and other essential information can sideline your offer no matter how great it is.
Include a Letter
Even though technology has automated real estate processes, never forget that real people are reviewing both sides of all interactions. This includes sellers, realtors, banks, and buyers. Submitting a personal note with your offer makes you a real person and gives the seller the opportunity to like you! Your note doesn’t have to be formal, just a quick thank you for looking over the offer or describing what your plans with the home are, or even wishing them luck on their decision-making makes you a real person with real dreams.
Buying a home may be stressful, but selling one can cause anxiety, too. Help the seller out by providing a copy of your loan pre-approval letter with your offer. This removes the doubt of payment and helps the buyer make a quick decision when looking over multiple offers.
Make an Offer of Time
Houses are moving quick and sometimes they sell so quickly that the seller doesn’t even have time to catch their breath. If you have the means and patience, offer a month or two of free occupancy. Mortgages normally come due 30-plus days after closing, so consider gifting that time to the seller. Time to secure new housing or to pack can make a huge impression when looking over multiple offers.
The Bottom Line
Tight markets stress everyone out, but by being prepared, you can reduce a lot of pain and anxiety in the process. The above tips will definitely get your offer noticed, but they aren’t the only perks that will gain attention. You can also offer to pay the seller’s closing costs or offer to clean out the property. Be ready with an immediate additional offer if your first one is declined or set up an escalation clause to automatically offer more money when there are multiple bidders involved.
Knowledge is power, especially when buying a home, so leverage all your information to make the best offer for the seller and get the home you want when you want it!