Q: What Does It Take For Buyers to Compete in a Seller’s Market?
Here are six tips to help homebuyers compete in a hot seller’s market.
In our extremely competitive seller’s market, buyers will need to be diligent when they craft their offers if they hope to compete with the many other buyers out there. Here are six tips you can use to edge out the competition if you’re looking buy a home:
Put more earnest money down. Make sure you’re pre-approved. You must be qualified with a lender before you go into a transaction. Mind you, there’s a difference between a pre-qualification and a pre-approval letter. To get a pre-approval letter, you need to file an application with a lender, which must then go through the underwriting process. This lets the seller know that you’re ready and able to proceed with the transaction and will make it to closing.
Find out what the seller wants. Have your agent reach out to the seller’s agent to find out what specifically they’re looking for. That information can be used to craft your offer around the seller’s needs, making it more likely that yours will be accepted. Sellers these days tend to want a quick close and they might also want a rent-back period to allow them time to find a home so they can avoid a double move.
Shorten or waive contingencies. If you choose to waive contingencies, be careful with certain ones, like the inspection contingency. You don’t want to find out the house has severe issues after you’ve purchased it. If you’re comfortable waiving the appraisal contingency, that will help the seller trust that the deal will make it to the finish line. For the finance contingency, if you can shorten the period to two or three weeks as opposed to a month, that will be a powerful addition to your offer.
Submit a love letter to the seller. Write a ‘love letter’ to the seller that details why you fell in love with their home and what your family plans to do with it once you move into it. You can even include a picture of your family to maybe tug on the seller’s heartstrings. To really stand out among your competition, consider making a video instead of a hand-written letter.
Submit your best offer first. Don’t submit an offer for less than their asking price just to leave room for negotiations. Instead, put your best foot forward from the very beginning. With as many buyers that are in the market, you can’t afford to hope that the seller’s agent will come back and ask for another offer; they’ll likely just pass you over for an offer with a better price.
If you have any other questions related to this topic or anything else to do with real estate, don’t hesitate to reach out to us. We’d love to help you.