Many real estate markets today are so hot that sellers are receiving multiple offers. That can make it tough for buyers to succeed in landing the house of their dreams unless they plan carefully. In a competitive market, it pays to strategize with your experienced real estate agent before you get to the offer stage.
Here are some steps to take if you’re trying to buy a house in a market where houses are attracting multiple offers.
It’s not a wise idea to navigate a seller’s market by yourself when looking for a new home. By working with a real estate agent, you can help establish which neighborhoods best fit your needs. Find an agent who knows the area and can provide expert advice. Your agent will have a list of “comps,” or comparable sales in the area so that you will know what houses are going for and how big of an offer you should make on a house. Your agent knows that there’s more to it than just a financial figure. There are other ways you can present an offer to get it accepted.
Never think you can succeed by yourself in a hot market simply by checking the various real estate websites. You’ll already be way behind the many savvy house hunters who are out there. Your agent will have instantaneous access to information when houses come on the market and you will need that edge in order to have a fighting chance at landing your dream home.
A seller will know your offer for prime New Jersey real estate is serious if you are all cash and showing proof of funds or if you have a pre-approval letter from your mortgage lender. This lets them know that you have been vetted by the lender for a certain amount. Make sure you’ve obtained a pre-approval letter and not just a pre-qualification letter. There is a big difference, and the pre-qualification is not as airtight as a pre-approval. If you have only a pre-qualification letter, it could hurt you if your offer is accepted and your financing falls through.
In a seller’s market, the seller holds all the cards. It’s important that you know the temperature of the market going in and what kind of offer will be necessary to win the bidding war. When multiple offers are expected to pour in for a property, the last thing you want to do is try to lowball the seller. You’ve got to assume that the seller will receive some strong offers out of the gate and you should consider presenting your best offer right away. If there are enough good offers, the seller won’t feel the need to negotiate. So if you really want that house, present a competitive offer. Give the seller a reason to consider your offer.
Try to present a “clean” offer. Waiving contingencies could increase your likelihood of winning the home. For instance, you could refrain from making your offer contingent on selling your current home before closing on the new property. In short, don’t give the seller a reason to reject your offer. Someone else might have submitted an offer with few, if any, contingencies. You’ll want to do the same in order to be part of the competition.
Also, have your agent find out what the sellers’ biggest needs are. Maybe a quick closing is important to them, or perhaps they would like to waive the inspection. Whatever the case may be, being flexible enough to help accommodate the sellers may be the push you need to become the top offer.
To show your seriousness in a multiple-offer scenario, increase the amount of your down payment to help guarantee your offer. By increasing the amount that you can pay upfront, you signal to the sellers that you are a high-intent buyer. That may be enough to get your offer accepted.
Another tactic that might work to land the home you love is adding an escalation clause that guarantees that you will automatically increase your offer if someone outbids you, up to a certain amount. These clauses usually guarantee you will beat other offers by $1,000. You can cap the amount of your final offer and ask the seller for proof of other offers.
Things will move fast in a hot market and you need to think on your feet. It’s inevitable that you will lose out on a house or two as the process unfolds. You’ll be disappointed, but learn and move on. Your real estate agent might call you at any time to let you know that a desirable house has gone on the market and you might need to try to see it as soon as possible. It could even be that one partner tours the house while the other is at work and will have to report back on whether they need to submit an offer ASAP. In a market where multiple offers are the norm, a day (or even a matter of hours) can make a huge difference.
If you’re ready to purchase a new home but need some help navigating such a competitive real estate market, contact The Lopez Property Group today for assistance. Whether you’re searching for Allendale homes for sale, Ramsey real estate, or Park Ridge properties, The Lopez Group can help.