The real estate market is heating up like the summer sun. Low inventory, multiple-offers, and offers that soar over asking price are great for sellers, not so much for buyers. If you're looking for an edge to ensure you get the home you want, here are a few tips.
Know your market
Make sure you have an experienced agent that can help you strategize based on how long you will own the home and your non-negotiable items. This should be done BEFORE you go on showings so that you can save some potential emotional trauma. Put in your criteria for a home and have the agent show you what those homes have recently sold for in your market. If it's above your budget, you need a game plan to compromise or wait to purchase until you have a higher budget.
Write a "practice" offer
Going over all the details of making an offer on a house BEFORE you fall in love with a house will ensure that you can get an offer written and submitted quickly when the right home comes along. Sometimes speed wins!
Watch the contingencies
"Sellers have the upper hand in a multiple-bid situation, and they want offers that are clean and concise," says NerdWallet. Asking the seller to pay closing costs, purchase a home warranty, or requesting that they make small repairs like fixing a leaky faucet can get your offer thrown in the trash.
Be flexible
In a multiple-offer situation, the seller is looking for the easiest path to closing. The trick is finding out what they really want—beyond the right price, of course. It could be that a shorter closing would do the trick. Or maybe you can offer them the opportunity to rent back until they're ready to make their move.
Up your budget
If you're a first-time buyer looking in a lower price range, or shopping for a one-level retirement home, you're in the most competitive market. Getting pre-approved for a little more could move you into a higher price bracket and eliminate some competition. Adding even a few thousand dollars could make the difference, and the change to your monthly mortgage payment will be negligible.
Cut associated ownership expenses
If you're worried about upping your budget, think of ways to save on associated expenses, and put that money into your mortgage instead. Look for homes without a homeowner's association or one that covers enough to off-set your insurance and maintenance expenses. That could save you several hundred dollars per month. Look at areas where you don't have to pay a toll for your daily commute (or, better yet, where you don't have to drive at all) and watch the property taxes. Those savings add up.
Write a letter
Yes, writing a sappy letter to the seller telling them all about you and why you love their home is shameless pandering, but sometimes shameless pandering works. Be careful to focus on what compliments of the home and what makes you a strong buyer for the home without mentioning protected classes - or your letter might not get presented to the seller.
In the heat of the moment
You may be tempted to compromise on key items or quit looking so it is important to stay focused. Try to cover the "what-if" items before you write the offer so you are confident under pressure.
Are you ready to make your move? Before you start looking at homes online, Call Sarah First!
