Today’s real estate market has high buyer interest and low housing inventory. With so many buyers competing for homes, it’s more important than ever to know the ins and outs of making a strong as well as competitive offer. Here are five tips to success for this important stage in the homebuying process.
1. Listen to Your Real Estate Agent
A recent article from Freddie Mac offers guidance on making an offer on a home in today’s market. It points out how emotional this can be for buyers and why trusted professionals can help a home buyer stay focused.
“Remember to let your homebuying 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.”
A real estate professional will be the primary source for any questions you have when you are ready to make an offer.
2. Understand Your Finances
Be sure to have a complete understanding of your budget and how much house you can afford. Reach out to your lender to get pre-approved for a loan early in the homebuying process. Only 44% of today’s prospective homebuyers are planning to apply for pre-approval, take this step so you stand out from the crowd. It shows sellers you’re a serious and qualified buyer. This 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 being sold today is receiving more than three offers. Plus it is only on the market for a few weeks. These are both results of today’s competitive market. As soon as you find the right home, work with your agent 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. In a competitive market, it’s important to stay active throughout the negotiation process. Your position can be strengthened with an offer that includes flexible move-in dates, a higher price, or minimal contingencies. There are, however, certain contingencies you should not forego. Freddie Mac explains:
“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 market makes it more important than ever to make a strong offer on a home. With these five tips and our knowledge of the real estate market, we can help you make a strong offer.
5 Tips to Make a Competitive Offer is from Keeping Current Matters 2020