Four helpful tips to help buyers navigate this market and win.
Buyers sometimes wonder if it’s even worth trying to compete against other buyers in a seller’s market with very little inventory. It’s not unusual for a seller to receive 20 offers in the first week, but it’s still a good idea to write an offer anyway. Here are four tips to make yours outshine the rest:
1. Submit a large deposit. Many sellers are worried that once they commit to an offer, the winning buyer might back out of the transaction or default on the contract after all other buyers have disappeared. The deposit is part of your down payment, so by increasing it above the normal limit, you’re showing the seller that you’re serious about closing. You’re only offering the seller more money sooner rather than later, but it speaks volumes. In California, you can get the deposit refunded if you decide to cancel during your investigation period.
2. Show the sellers that you’re qualified. Almost every offer will be accompanied by a lender letter to stand out. Ask your lender for a loan pre-approval letter, which is different than a pre-qualification letter. Being a pre-approved buyer makes you stronger in the seller’s eyes. Don’t forget to have your lender call the listing broker to tell them that you’re a pre-approved buyer. This phone call goes a long way.
“It’s hard to juggle multiple closings if you’re selling and buying simultaneously.”
3. Give the sellers time to move. Buyer possession is often a sticking point. It’s hard to juggle multiple closings if you’re selling and buying simultaneously, and it’s even more difficult if the seller is doing the same. Cut the seller some slack by giving them a few days or even a week to move out after closing without expecting compensation.
4. Write your best offer. Don’t hope for negotiations, just offer your highest price and even consider an escalation clause that says you’d be willing to pay a certain amount over the highest offer they get on the home. Sometimes sellers deliberately set a price below comparable sales to generate multiple offers, so paying a little extra doesn’t necessarily mean you’re paying over market value.
If you have any questions about purchasing a home in today’s market or if you have a topic that you’d like us to cover, give us a call or send us an email. We look forward to hearing from you.