Your ideal neighborhoods are identified, and you are ready to start the bidding war on your favorite properties – and get your offer accepted. As more and more people are looking to become homeowners, it’s important to prepare yourself for everything that comes with the home search process. With so much on the line to consider, here are a few tips to put you ahead of the competition.
1. Listen to Your Real Estate Advisor
If you’re like most of us, you have a small understanding of the market in terms of the whole scope. In other words, a drop in the ocean in terms of housing market knowledge. With so many things to consider, buying a house can be an emotionally taxing and stressful endeavor for buyers. Hiring an agent is one of the best decisions you can make when purchasing a home. Your trusted agent can help you stay focused on the most important things. Your real estate professional should be your primary source for answers to the questions you have when you’re ready to make an offer.
2. Understand Your Finances
Having a complete understanding of your budget and how much house you can afford is essential. The best way to know this is to get pre-approved for a loan early in the homebuying process. 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. Most sellers won’t be as willing to take time to answer your questions or giving you a tour of their home if you don’t have a pre-approval letter in hand. It shows sellers you’re a serious and qualified buyer and can give you a competitive edge if you enter a bidding war. In addition, it cancels out a lot of time, energy, and surprises dealing with paperwork at closing because there is no guesswork to what you can afford.
3. Be Ready to Move Quickly
According to the Realtors Confidence Index published monthly by the National Association of Realtors (NAR), the average property sale today receives over three offers and is only on the market for just a few weeks. These are both results of today’s competitive market, showing how important it is to stay agile and vigilant in your search. As soon as you find the right home for your needs, be prepared to submit an offer as quickly as possible. After all, time is money when it comes to the housing market.
If your initial offer is not accepted, that is okay. Just make sure you are ready to go with a counteroffer in hand. Negotiating happens quickly so it’s important that you’re prepared and available at all times.
4. Make a Competitive Offer
It’s only natural to want the best deal you can get on a home. However, 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 and prevent you from countering. The expertise your agent brings to this part of the process will help you stay competitive. The best way to go in a seller’s market is to start strong. Assess the property’s market value with your agent and do an analysis to help you understand what homes are selling for in that neighborhood.
Another way to stand out is to make a connection with the seller. Just like in job interviews, you want to tell them why you want this property so badly. You could touch on the neighborhood park access, top-rated schools for your growing family, or maybe their kitchen designs are everything you’ve ever dreamed of and more. Establishing rapport with the sellers can tug at heart strings and help them remember your name when they’re reviewing potential offers.
5. Limit Contingencies
Contingencies are opportunities to address unforeseen issues and can add time to the home negotiation process. They’re beneficial to buyers but can be a nuisance to sellers who are ready to get the ball rolling. The home offer with the fewest contingencies is usually the most attractive because it means the seller doesn’t have to do as much extra work before handing off the keys to the castle. As a buyer, removing as many restrictions related to the sale and being flexible can make your offer stand out to the seller.
One counter to consider in limiting contingencies is if the house has been on the market for a few months. With a strong offer and a few smaller contingencies, you still might have a fair shot.
6. 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 important to stay nimble throughout the negotiation process. You can strengthen your position with an offer that includes flexible move-in dates, a higher price, or minimal contingencies.