In case you haven't noticed, it's a jungle out there! When Covid 19 first crept into our lives there was a lot of uncertainty surrounding, well everything, but especially the housing market.
Tips for Getting Your Offer Accepted in a Hot Market
Dated: October 22 2020
In case you haven't noticed, it's a jungle out there! When Covid 19 first crept into our lives there was a lot of uncertainty surrounding, well everything, but especially the housing market. People feared the recession would trigger a housing crisis and home values would plummet. Turns out, the opposite has happened!
Record-low mortgage rates, coupled with increased buyer demand, has lead to one of the strongest years for real estate sales to date! And when inventory is scarce and you are competing with other buyers, you have to make a competitive offer in order to get the home you want.
There are a lot of tips and tricks that we give our clients to help make their offer stand out. Here are a few things we advise our clients to do when multiple offers are on the table and they want to make this home their own:
1. Don't just focus on price- Everyone assumes the highest sales price always wins, but that isn't necessarily true. There are lots of items in the contract that cost the sellers money (title fees, home warranties, HOA transfer fees, etc). If you offer to cover some of these it can make your offer the one that ultimately nets the sellers the highest return.
2. Shorten the Option Period- The option period is the worst part of the transaction for sellers. They have now taken their home off the market and are completely at the mercy of buyers who have the "unrestricted right to terminate". To make your offer more attractive you can shorten that period (which is typically 10 days) to 7 or even 5 days. This still gives you time to do your due diligence, and the sellers don't have to wait a full 10 days to know if the sale is going through or not.
3. Find out what matters most to the sellers- We always call and have a conversation with the listing agent so we can get the scoop on the sellers' situation. Do they need a particular closing date? Will it benefit them to be able to lease the home back after closing for a short period? Everyone's needs are different, and we want to be able to meet as many of their needs as possible in order to secure that home for our clients!
4. Offer an uneven amount- Since we also list a lot of homes, we get to see what it's like on the other side of the table. When there are multiple offers it is surprising how many buyers will offer the exact same amount, and it's almost always an even number ($350k, $500k, etc). By adding a nominal amount to the end you can actually bump your offer up just slightly from the pack, for example offering $350,500 instead of a flat $350,000. If all other terms are the same, every seller will accept the highest amount, even if that is just a few hundred dollars more than the others. It doesn't take much to stand above the rest!
5. Waive the Appraisal- Another big obstacle for sellers in a hot market is the lender's appraisal. In some cases that appraisal comes in below the sales price, and that can cause the sale to ultimately fall through. If you have a decent down payment, you can offer to guarantee the sale even if the home doesn't appraise. (Talk to your Realtor about how this process works). When sellers know they have a guaranteed sales price no matter what the home appraises at, they are very inclined to accept that offer.
There are many other things that we can do in a competitive offer situation that we are happy to share with you. One of the biggest tips we can give you when inventory is low is GET A GOOD REALTOR! You need someone who finds out about things the minute they hit the market, knows about properties that haven't hit the market yet, and can get you in the door as soon as possible when a home you love comes available. Have questions about the home buying process or just want some expert assistance? That's what we're here for, give us a call and let us go to bat for you!
Serving families in the Katy and West Houston real estate market for 10 years, Jennifer was named a Top 20 Under 40 Rising Star in Real Estate by the Houston Association of Realtors in 2014, was named....