Here are seven great tips for helping you compete in a low-inventory market.
On the Sunday morning prior to the recording of this video, we talked about a very important topic on our weekly radio show: the consistent lack of inventory, and how buyers can overcome it. Today I’m summarizing our in-depth discussion by sharing the seven ways that a homebuyer can get their offer accepted in today’s market:
1. Be patient in your home search. Four years ago, you could’ve called us up, gone out with us to look at four or five houses in a single day, and made an offer on one. In today’s market, however, we may only be able to find one or two houses right away that fit your criteria, and even then you may not like what you see.
2. Get pre-approved. Waiting to get pre-approval until the moment you find the right house is the wrong approach, especially in a fast-paced market. That perfect house will be gone by the time you get pre-approved for it, so talk with your lender before starting your search.
3. Be responsive. If a home matching your criteria hits the market today at 1 p.m., we send the listing over to you at 1:10 p.m., and if you get off of work at 4 p.m., it’s vital that you get in to see that house right after work or as soon as you possibly can. In this market, there’s no such thing as, “Yeah, we’ll check it out next weekend.”
Waiting to get pre-approval until the moment you find the right house is the wrong approach.
4. Be prepared to go over the asking price. In yesterday’s market, people were willing to negotiate; now, people are expecting full price—if not something a little over. You need to be prepared to go over a seller’s list price, especially if you’re asking for closing costs.
5. Use an escalation clause. Let’s say you find a house that you absolutely love for $200,000 and you don’t want to risk losing it to someone else’s higher offer. We can submit an offer for $200,000 that states you’re willing to go up to $210,000, for example. The great thing is that we can limit how far you’ll go above anybody else’s offer; you can state your willingness to max out at $210,000 while also declaring a minimum of no more than, say, $1,000 over the next highest offer. So, in this example, if someone submits an offer for $205,000, you’ll get the house for $206,000.
6. Find out the seller’s situation. As your buyer’s agents, we’ll contact the listing agent or the seller directly and ask them by what date they need to be out of the house. That way, we can draft the most accommodating and attractive terms for them in your offer. Remember: Price is important, but it’s not the only valuable component of an offer.
7. Write a letter or shoot a video. Create a human connection with the seller by telling them why you and your family love their home. Try to appeal to their emotional side. We’ve had instances where sellers didn’t take the “best” offer because they really connected with the buyers on a personal level.
BONUS TIP: In the event you don’t win out on the home you love, we can help you write a backup offer. If the seller agrees to accept your offer as a backup, then you’ll be the one to whom they turn should the original winning offer fall through for any reason.
Hopefully you found these tips enlightening. Don’t hesitate to reach out by phone or email if you want to have a more in-depth chat about your specific home buying needs. Even if you just have a few general questions, I’m always more than happy to be of assistance.