Even though the number of homes for sale is rising, it’s still lower than historic norms. With this combination of low supply and high buyer demand, a multi-offer scenario is the new normal. If you’re buying a home, you’ll want to do what you can to stand out from the competition. Here are five things to keep in mind when you’re ready to make an offer.
1. Know Your Numbers
A complete understanding of your budget and how much home you can afford is essential. That’s why you should connect with a lender to get pre-approved for a loan early in the homebuying process.
Taking this step shows sellers you’re a serious, qualified buyer and can give you a competitive edge in a bidding war.
2. Brace for a Fast Pace
According to the Realtors Confidence
Index from the National Association of Realtors (NAR), the average home is on the market for just 17 days – that means from start to finish, a house for sale in today’s climate is only active for about 2.5 weeks.
A skilled agent will do everything they can to help you stay on top of all possible opportunities. As soon as you find the right home for your needs, a real estate professional will help you draft and submit your best offer as quickly as possible.
3. Lean on a Real Estate Professional
While homebuying may seem like a whirlwind process to you, local real estate agents do this every day and know what works. That expertise can be used to give you a significant leg up on your competition. A local real estate professional can help you consider the right levers to pull that might be enticing to a seller, like minimizing contract contingencies (conditions you set that the seller must meet for the purchase to be finalized).
It may seem simple, but catering to what a seller may need can help your offer stand out. Just remember, there are certain contingencies you don’t want to give up, like the home inspection.
4. Make a Strong, but Fair Offer
Let’s face it – we all love a good deal. In the past, offering at or near the asking
price was enough to make your offer appealing to sellers. In today’s market, that’s often not the case. According to the latest Realtors Confidence Index from NAR, 50% of offers were above the list price in July.
In such a competitive market, emotions and prices can run high. Use an agent as your trusted advisor to make a strong, but fair offer based on market value, recent sales, and demand.
5. Be a Flexible Negotiator
If you followed tip #3, you drafted the offer with the seller’s needs in mind. That said, the seller may still counter with their own changes. Your trusted real estate advisor can help you understand the seller’s request and navigate the conversation, all the while keeping your best interest at heart.
“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.”
– Freddie Mac