8 Tips to Help Buyers Shine in a Multiple Offer Market
8 Tips to Help Buyers Shine in a Multiple Offer Market
The housing market is heating up along with the summer temperatures. Low inventory of available homes has increased demand and buyers can find they are not the only ones interested in their dream home. What can a buyer do to increase their chances of being the winning bid in a multiple offer situation? Here is a list of 8 things buyers can do when they find they are competing for the home of their dreams.
Work with an experienced professional.
This may seem like a no-brainer, but in a competitive market, it is critical to work with an agent who knows how to navigate the obstacles of a real estate deal. In this kind of market, you don't have time to make mistakes. An experienced agent will know how to negotiate on your behalf. You want an agent who will represent you well to the seller. The seller's agent will likely reduce the offers to working only with agents who are respectful, responsive, and reasonable. When multiple offers are on the table, the seller has all the leverage.
Get pre-approved rather than pre-qualified.
These two lending terms can be confusing. What's the difference? Pre-qualification is when a lender looks at a buyer's overall financial picture and provides a letter that shows the buyer has solid finances and the amount the buyer will likely qualify for, but the actual approval won't be pursued until the buyer starts the mortgage process. It is still possible for a buyer to be declined. Pre-approval is a more in-depth process where the lender pulls credit report data, requests pay stubs, bank statements, W-2s, and any other factual information the lender will need to approve a loan. Most pre-approvals are the same as a mortgage approval, with a property appraisal being the final step needed. When a buyer comes with a pre-approval letter in hand, it signals to the seller that they are a serious buyer and will move ahead of other buyers who are not as ready to pull the trigger.
Make your first offer your best offer.
This is not the time to make a lowball offer. If this is truly a house you are interested in, then you and your agent need to figure out what your best offer is. You may not get a second chance. If your offer comes in way below the other offers, yours may just get thrown out. This is when having an experienced agent is crucial. Your agent can be in contact with the seller's agent to find out what the buyer is looking for. The price isn't the only issue at stake. The sellers will often have other factors that you may be able to address in your offer.
Once you have an idea what the seller is looking for, you'll be able to tailor your offer to make it more appealing to the seller. For instance, does the seller need to stay in the home until a particular date? Work out ways to accommodate the seller as you choose a closing date. Do they need to close quickly because they already have a contract on their next home? There are often issues that you can offer to work with to make your offer more attractive.
Make a clean offer.
Along with being flexible, you'll need to be aware that you cannot expect the same in return. Your offer needs to be free of contingencies. If you need to buy this home contingent on the sale of your current home, it is unlikely that you will win this one in a competitive market. If you really wanted granite countertops and this house doesn't have that update, but you love everything else, now is not the time to demand an allowance for upgrades.
Carefully consider your loan options.
If you qualify for a conventional loan, but you really want to use your VA loan benefit or an FHA loan, this might be a time to consider using that conventional loan. VA loans and FHA loans often have stricter guidelines and can have more contingencies that may make the deal less smooth. Again, this is a time that an experienced agent can help you make the best decision for the moment. There are often issues that an inexperienced person simply wouldn't know. In this market, a simple mistake might cost you the deal.
Homeowners can be very personal when it comes to their homes. Include a personal letter in your offer describing why you want this home. Sometimes sellers can be more inclined to sell to someone they believe will appreciate all the hard work they've put into their home. Or they may be moved to hear of a family who looks forward to raising their family in a home where the owners have many fond memories of raising their own family. If you decide to write a letter, make sure you are genuine in your sentiments. A manipulative letter could have the opposite effect. Count the cost of using this technique. Your agent will likely be able to advise you on this based on their experience.
Keep your chin up.
Competitive markets are not for the faint of heart. You may make offers on a number of homes before you finally reach success. Try not to get too emotionally invested. Hold each home loosely and know that tomorrow holds hope for finding the next one. Sometimes you need to take a break and give yourself a minute. When you resume the search, you just might find that perfect listing you've been waiting for.
House hunting can feel like a carnival ride, exciting and draining all at the same time. But when you have the right information, a healthy dose of patience, and an experienced guide, finding your dream home, even in a competitive market, can eventually be your reality. Call one of our experienced Fit Realty agents today!
Posted By +SimonHouses.com