by Jessica Bischof, Realtor, Libertas Real Estate Branch Manager
If you’re thinking of making a move to a new home, then you likely know that the real estate market is hot, hot, hot. Inventory is at record lows, with many homes seeing multiple offers over asking price the first day on the market. It’s a great time to sell, but it’s not so easy being on the buying side of the negotiating table. But that doesn’t mean you have to miss out on your dream home! Here’s what you must do to be ready to compete in this market:
- Who You Work with Matters — Having a responsive, experienced full-time real estate agent is vital. Now is not the time to work with your neighbor’s sister who moonlights in real estate. You want an agent who’s working full time for you, knowledgeable on current with market trends and available to be highly responsive to new listings.
- The Lending Team — You absolutely must be prequalified and preferably pre-underwritten with a reputable mortgage lender (also preferably not through a “big bank”). Savvy realtors know that most big banks who do loans run late — and that can be a deterrent from getting your offer accepted. Talk to a few lenders and find one who is responsive and informative. (Pro-tip: ask your Realtor who they like to work with as this is often the best way to find a great lender!) Get your Realtor a copy of your loan qualification ahead of time; or if you’re a cash buyer, have statements showing your available cash ready to send over with your purchase offer.
- Show Me the Money — In this market, it’s important to understand that the list price on the MLS is “the starting price.” The majority of homes are selling for over list price, and if you’re shopping for homes at the top end of your budget or prequalification, you’re likely to be continually outbid in these current conditions. Discuss strategies with your Realtor and lender about a smaller down payment to free up cash allowing you to increase your offer, even over appraised value, if necessary, to win the bid.
- What’s in it for the Seller — Besides the price, there are other tricks that can entice a seller to pick your offer. Shortening the inspection period, or waiving it completely, limiting inspection repairs to structural items or repairs over a certain value can help. This lets the seller know they won’t be pestered with requests to tighten screws on the cabinets or fix a drippy faucet. If it’s easier for them to sell, it’s better for you.
- What’s in it for the Seller Part 2 — Many sellers are moving somewhere and also having a difficult time knowing where they will purchase next. If you don’t have to occupy the property immediately, giving them the option to lease it back from you for a few weeks can make your offer more appealing. It’s imperative to discuss this with your Realtor to ensure it is structured correctly and to protect your interests.
- Make It Personal — Writing a personal letter telling the seller about your family and why you love the home will make a difference for some sellers. Some sellers prefer their home to be purchased by folks who will live there and love it. I always think it’s a great idea to include a family photo (pets too!) as it makes you “real” and not just a number.
- Trust the Process — Buying a home in this market can be frustrating and challenging. Be prepared to act fast, bring your best offer to the table and, of course, listen to the advice of your agent!