Today’s real estate market clearly has high home buyer interest and low housing inventory. With so many buyers competing for a limited number of houses for sale, it’s more important than ever to know the ins and outs of making a confident and competitive offer. Here are five keys to success for this important stage in the home buying process.
1. Listen to Your Real Estate Advisor
An article from Freddie Mac offers guidance on making an offer on a home today. Right off the bat, it points out how emotional this can be for buyers and why your trusted agent can help you stay focused on the most important things:
“Remember to let your home buying team guide you on your journey, not your emotions. Their support and expertise will keep you from compromising on your must-haves and future financial stability.”
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 home buying process. Only 44% of today’s prospective home buyers are planning to apply for pre-approval, so be sure to take this step so you stand out from the crowd. It shows sellers you’re a serious and qualified buyer and can give you a competitive edge if you enter a bidding war.
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 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.
4. Make a Fair Offer
It’s only natural to want the best deal you can get on a home. However, Freddie Mac also warns that 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. The expertise your agent brings to this part of the process will help you stay competitive:
“Your agent will work with you to make an informed offer based on the market value of the home, the condition of the home and recent home sale prices in the area.”
5. 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 (conditions you set that the seller must meet for the purchase to be finalized). Freddie Mac explains that there are, however, certain contingencies you don’t want to forego:
“Resist the temptation to waive the inspection contingency, especially in a hot market or if the home is being sold ‘as-is’, which means the seller won’t pay for repairs. Without an inspection contingency, you could be stuck with a contract on a house you can’t afford to fix.”
Today’s competitive landscape makes it more important than ever to make a strong offer on a home. Connect with one of our local experts to make sure you rise to the top along the way. We’ve been guiding home buyers and sellers since 1961.
Source: “Things to Consider When Buying a Home” Spring 2021 Edition, courtesy of Keeping Current Matters