Find out how to make an offer in today’s competitive real estate market that a seller cannot refuse!
Anyone that has bought a home in the past year will tell you that home buying can be challenging. Lots of home buyers and a low inventory of homes means bidding wars, rising prices and many other hassles.
The good thing is you can be prepared for home buying in today’s competitive real estate market. Find out how to make an offer the seller can’t refuse!
Professionally Represented by a Buyers Agent
How many times have you negotiated a real estate sale in the past year? Can you stay unemotional and be an effective negotiator?
During a bidding war is the wrong time to discover you are in over your head! This is why it’s advisable to use the professional representation of a buyers agent.
You should expect at least one counteroffer so get ready for negotiating. The main things that are negotiated are:
- Closing date
- Seller concessions
- Closing costs assistance from the sellers
Your Realtor will be essential when dealing with the counteroffer. They will ensure that your best interests and bottom dollar are protected!
Spend a little time to find a local Realtor with the knowledge and experience you deserve!
Set Your Budget and Have a Pre-Approval Letter
The next step is setting your budget and getting a Pre-Approval Letter.
You need to know exactly how much you can afford so you do not waste any time in today’s fast-paced housing market. A pre-approval letter proves that you’re a qualified, prepared and serious buyer.
It also lets you make an offer knowing that you can afford the home. You do not want to end up being House Poor!
Homes are hitting the market and going under contract in just a few days sometimes. If you wait until you find a home you like to talk to a lender, you are wasting your time!
You are not just wasting your time! You would be wasting the time of the seller and the real estate agents as well.
Time is money and wasting other people’s time is rude!
When you find the perfect house, you want an offer so good that the seller cannot refuse it! And you must be able to make offers quickly in today’s extremely competitive market!
The supply of homes for sale has stayed below the 6-month supply that is needed for a normal balanced market. Be sure that when you decide you need to make an offer, you work with your Realtor to present it ASAP!
You need to completely understand how much closing costs and down payment you will need to buy a home. You need to completely understand the maximum home price you can afford. Discussing these topics with your lender is crucial to your home buying success!
Collect information like pay stubs, tax returns and bank statements prior to meeting with your mortgage lender. Being organized will help make the mortgage pre-approval process faster and easier.
I understand if you feel there is too much paperwork to get a mortgage. But there are good reasons that a mortgage requires so much documentation!
After the housing bubble and crash, the government stepped in. Today, the government has rules that the bank must prove you are capable of paying the mortgage.
While this sounds like good common sense, it wasn’t always this way!
Before the housing market crashed, almost anyone could get a mortgage. Including people that shouldn’t have been given a mortgage!
This led to many foreclosures so the government changed the laws to make sure this can’t happen again.
While this may appear to be a gigantic pain in the butt, it also means that you can get a mortgage interest rate around 4%.
There was a simpler mortgage process ten or twenty years ago but buyers paid a much higher interest rate! Home buyers were paying 8.12% back in the 1990s for a 30 year fixed rate mortgage!
Almost twice what home buyers are paying today!
Instead of complaining about the paperwork, be glad that you can buy a home with low mortgage rate.
Serious Home Buyers Make Serious Offers
There are many other things that make an offer better besides a Pre-Approval Letter or Proof of Funds!
Your best offer will be based on other home sales and listings in the area. Your buyers agent will know the communities you are looking at.
Your Realtor is going to be a key player in assisting you make an offer based on their knowledge and experience. Your Realtor will make your offer reflect:
- Recent sales of similar homes
- Prices of competing listings
- The condition of the house
- What you can afford
- Your timeline
Discuss with your agent how you can make your offer competitive in today’s real estate market!
The Need for Speed When Making an Offer
I mentioned earlier how time is money. This is very true when it comes to the closing date on your offer!
Make sure the seller understands you want to close as quickly as possible! Home sellers want a quick, efficient closing to allow them to move forward with their life. A short time from the offer to the final closing will show the seller that you are very serious.
There is a fine line between too much time and rushing how long it takes to get everything done. Your Realtor understands how long it takes for inspections and all the other stuff.
Recruit Your Home Buying Team
After you have identified the home of your dreams, you must take action immediately! This means having it inspected and getting estimates for anything you want to change. The last minute is not the time to start scrambling to find an inspector, contractor, surveyor etc.
It’s best to know who you want to use and the associated costs for their professional services. Your Realtor will know who you can use or you can ask your friends and family for recommendations.
The Take Away
Having a local expert Realtor on your team is your best bet to making an offer the seller cannot refuse! It doesn’t matter if it is your first home or your sixth, working with a Realtor is key to home buying success!