Yes, the market is tough for Buyers right now. Inventory is low but demand is high. It is not uncommon for homes to sell for well over asking price. Buyers often find themselves in bidding wars and competing against all-cash offers.
How can you secure a home in the hot real estate market? You’ll need a great strategy and a lot of LUCK! Here are our best tips:
FIND A GOOD REAL ESTATE AGENT
Finding the right real estate team can be a huge advantage in a competitive market. You want someone who knows your local area and will alert you to listings as soon as they hit the market, if not before. A good buyer’s agent will know how to make your offer stand out. Interview more than one agent and ask for references from recent clients. A good fit is key.
CHOOSE A LENDER WITH LOCAL RELATIONSHIPS
A local loan officer can help you win a bidding war. Real estate agents know local loan officers and will remember prior transactions with them that went smoothly. A local lender will provide a dedicated loan officer that will be accessible and guide you through the process. A local lender will have contacts with inspectors, title agents and appraisers that know your market. A national lender may not prioritize your application and may not understand the unique needs of lending in your area.
CONSIDER THESE SUGGESTIONS:
- Focus only on homes that meet your criteria. Don’t put in offers on every home just because you haven’t gotten an offer accepted.
- Provide a strong conditional approval. Having a fully documented and underwritten loan approval shows you’re a serious buyer and allows for a speedy closing.
- Consider waiving contingencies. Fewer contingencies can make your offer more competitive. Consider removing financing, appraisal, or inspection contingencies.
- Include an escalation clause. An escalation clause says that you will offer “X” amount over any higher offers that are presented. This allows you to always present your “highest and best” offer. Be sure to put a cap on your escalation.
- Offer a higher earnest money deposit. An earnest money deposit (EMD) shows the seller you’re a good faith buyer, a higher EMD shows your serious about their home.
- Accommodate the seller’s closing time. Some sellers already have another home they are purchasing or a job transfer and require a fast closing. Other sellers may be waiting for a new home build or to finish a school year. Being flexible with your closing time can give you an edge.
- Ask your agent or lender to reach out to the listing agent. Establishing rapport and a strong relationship can put your offer on top.
- Write a love letter to the seller. Let the seller know what you love about their home and why you’re making an offer. This may be controversial but puts a face to the offer and can make a difference to the current homeowner.
Keep LUCK on your side of the table!
We’re here to help. Give us a call.