In today’s sellers’ market, standing out as a buyer is critical. Multi-offer scenarios and bidding wars are the norm due to the low supply of houses for sale and high buyer demand. If you’re buying this fall, you’ll want every advantage, especially when you’ve found the home of your dreams.
Below are five things to keep in mind when it’s time to make an offer.
1. Know Your Budget
Knowing your budget and what you can afford is critical to your success as a homebuyer. The best way to understand your numbers is to work with a lender so you can get pre-approved for a loan. As Freddie Mac puts it:
“This pre-approval allows you to look for a home with greater confidence and demonstrates to the seller that you are a serious buyer.”
Showing sellers you’re serious can give you a competitive edge. It enables you to act quickly when you’ve found your perfect home.
2. Be Prepared To Move Fast
Speed and the pace of sales are contributing factors to today’s competitive housing market. According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), the average home is on the market for just 17 days (and yes, we’re seeing the same stats here in Lancaster County). As the report notes:
“Eighty-nine percent of homes sold in July 2021 were on the market for less than a month.”
When homes are selling fast, staying on top of the market and moving quickly are key. (This is why I help you keep a firm pulse on the market and keep you in the loop as soon as new homes become available.) After you’ve worked with your agent to find the home that suits your needs, they’ll help you put together and submit your best offer as soon as possible.
3. A Real Estate Professional Can Lead You to Victory
No matter what the housing market looks like, rely on a trusted real estate advisor. As Freddie Mac says:
“The success of your homebuying journey largely depends on the company you keep. . . . be sure to select experienced, trusted professionals who will help you make informed decisions and avoid any pitfalls.”
Agents are experts in the local real estate market. They have insight into what’s worked for other buyers in your area and what sellers may be looking for in an offer. It may seem simple, but catering to what a seller may need can help your offer stand out.
In short: Call me. It won’t cost you anything but a few minutes of your time and will ensure you have an agent committed to working FOR YOU.
4. Craft a Strong, Fair Offer
In the past, offering at or near the asking price was enough to make your offer appealing to sellers. In today’s market, that’s often not the case. According to the latest Realtors Confidence Index from NAR, 50% of offers are above the list price.
In such a competitive market, emotions and prices can run high. Having an agent to help craft a strong, fair offer is critical in these situations. Your agent can help you understand:
- The market value of the home
- Recent sales trends in the area
- Current buyer demand
Note: This is where many buyers have become apprehensive, worrying that maybe they’ll overpay for a home. Well, maybe not.
As part of a typical marketing strategy, many agents will actually encourage the seller to list just below market value to stimulate more interest and increase the likelihood that competitive offers will drive the price up. Where the home purchase is being financed, a lender will be ordering an appraisal to determine the value of the collateral for the loan (the house). Mortgage lenders almost never loan more than that value.
In other words, if the appraisal falls short, you’ll know. At that point, you can determine whether you still wish to proceed with the purchase or not. There are a number of options/factors to be discussed with your agent on this so please, by all means, just ask. I’m here to help you through this.
5. Understand the Seller’s Needs, but Resist Waiving Certain Contingencies
When crafting an offer, you’ll want to keep both your best interest and the interest of the seller in mind. Your trusted real estate advisor will help you consider which levers you could pull, including contract contingencies (conditions you set that the seller must meet for the purchase to be finalized). Of course, there are certain contingencies you don’t want to give up, like the home inspection.
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 housing market makes it more important than ever to make a strong offer on a home. Let’s connect to make sure your offer rises to the top.