Beating Out Your Competitors in a Multi-Offer Situation
As state restrictions slowly begin to lift, homebuyers will likely find themselves in a unique position. Though experts debate whether it will be a buyer’s or sellers-market at the end of this pandemic, it’s best to prepare for both scenarios. Understanding your market will also prepare you for difficult situations, such as going up against multiple offers on a house you want.
There’s no guarantee that your offer will always win, but with proper research and guidance from your real estate agent, you may have a better chance for success.
Meet with a Lender First
Obtaining an approval letter from a mortgage lender should be your first step in the homebuying process. Sellers want to know that their buyers are approved because they know that will lessen the chance of trouble or termination later into the transaction. We recommend working with your Mortgage Advisor to have your approval in hand before you start making offers.
Keep in mind that you need to work with a trusted lender. A “nice” lender who can’t follow through with promises made, isn’t a good lender at all. If your lender fails to meet deadlines or doesn’t communicate proactively, the entire transaction could be at stake.
Understand the Seller
It’s important to remember that even though this is a business transaction, the sellers are human beings. Consider writing a carefully thought out letter to accompany your offer. Tell the seller a little bit about yourself and your family. Outline specific features of the house or location that appeal to you. None of this is required, but it might be the extra step that catches the seller’s attention and gets your offer considered over someone else’s.
Know Your Market
A “normal” real estate market has a 6-month supply of homes listed for sale. In other words, if no new homes came on the market, the current amount of available homes for sale would last approximately six months. Typically, spring is the best time to sell a home because the market is overflowing with buyers who move quickly and will often pay more than asking price.
If you find yourself in a seller’s market, you’ll need to act fast. Mainly, you and your real estate agent must work together to write a solid offer as soon as you find the home you want.
Make a Competitive and Realistic Offer
Typically, when a seller receives an offer, the first thing they’ll look at is the price. If you offer too low, you run the risk of insulting the seller. In a competitive market, you’ll likely eliminate yourself from the consideration pool by submitting an offer that’s too low.
However, this doesn’t mean you need to make an offer at or above asking price. Your offer just needs to be competitive, based on an analysis of the current market. Your real estate agent should be able to help provide you with some recent comparable sales in the neighborhood to determine the average price for the area.
You might be surprised at how far a little flexibility and understanding will take you. As the buyer, if you make the process uncomplicated and easy for the seller, your offer immediately becomes more attractive. Yielding to the seller’s wants when it applies to the closing date, concessions, minor repairs, may help you seal the deal.
Interested in learning more? Your journey begins here.