5 Tips for Homebuyers Who Want to Make a Competitive Offer
Today’s real estate market has high buyer interest and low housing inventory. With the large number of buyers competing for a limited number of homes, it’s more important than ever to know the tricks & trades of making a self-assured and competitive offer. Listed below are five keys to success for this crucial stage in a homebuying venture.
1. Pay Close Attention to Your Realtor
A recent article from Freddie Mac offers specific advice on making an offer on a home in today’s market. Right out of the gate, it points out how emotional this can be for buyers and why trusted professionals can help you keep on track regarding the most important things:
“Remember to let your homebuying team guide you on your journey, not your emotions. Their support and expertise will keep you from compromising on your must-haves and future financial stability.”
Your Realtor should be your primary communication channel when it comes to answering questions you have once you're ready to make an offer.
2. Understand Your Finances
It is essential to have a total & comprehensive understanding of your budget, and how much you can afford. To achieve this important step, simply reach out to your lender early in the homebuying process for pre-approval on a loan. Only 44% of today’s prospective homebuyers are planning to apply for pre-approval, so be sure to take this step so you stand out from the crowd. It shows sellers you’re a serious, qualified buyer and can give you a competitive edge if a bidding war occurs.
3. Be Ready to Move Quickly
According to the Realtors Confidence Index, published monthly by the National Association of Realtors (NAR), the average property being sold today is receiving more than three offers and is only on the market for a few weeks. These are both results of today’s competitive market. As soon as you find the right home that matches all of your wants & needs, be ready to work with your agent on submitting an offer as quickly as possible.
4. Make a Fair Offer
It is an obvious norm, to want the very best deal you can get on a home. However, Freddie Mac also warns that submitting an offer that’s too low can lead sellers to doubt how serious you are as a buyer. Don’t submit an offer that will be tossed out as soon as it’s received. The expertise your agent brings to this important part of the process will help you stay well informed and competitive:
“Your agent will work with you to make an informed offer based on the market value of the home, the condition of the home and recent home sale prices in the area.”
5. Be a Flexible Negotiator
After submitting an offer, the seller may accept it, reject it, or counter it with their own changes. In a competitive market, it’s paramount to be pliable throughout the negotiation process. Your position can definitely become bolstered with an offer that includes things like flexible move-in dates, a higher price, or minimal contingencies (conditions you set that the seller must meet for the purchase to be finalized). There are, however, certain contingencies you don’t want to forego. Freddie Mac explains:
“Resist the temptation to waive the inspection contingency, especially in a hot market or if the home is being sold ‘as-is’, which means the seller won’t pay for repairs. Without an inspection contingency, you could be stuck with a contract on a house you can’t afford to fix.”
Today’s competitive market makes it more important than ever to make a strong and secure offer on a home. Entrust an experienced realtor who can help you be ultra smart and competitive along the way.
~Real Advantage Partners, RE/MAX Precision team