Wednesday, June 26, 2013

Making an Offer in a Seller's Market

In today's fast paced real estate market it is not uncommon to see multiple offers and buyers are feeling the heat.  Low inventory  has buyers scrambling to put their best foot forward when making an offer.  Sometimes home buyers wonder if it's even worth trying to compete against other buyers in a sellers market and can often get frustrated.  If you love the home, it's almost always a good idea to write an offer anyway. Here are tips to make your  offer more appealing than the rest:

 Submit a good earnest money deposit. 

Many sellers are worried that once they commit to an offer, the winning buyers might back out of the transactionafter all the other buyers have disappeared. The earnest money deposit is part of your down payment. By increasing it above normal limits, you are showing the seller you are serious about closing. You're only offering the seller more money a little sooner than later, but it shows you mean business.

Show the Sellers You Are Qualified.

Almost every multiple offer will be accompanied by a lender letter. To stand out, ask your lender for a pre-approval letter, which is different than a prequalified letter. Being preapproved makes you a stronger buyer in the seller's eyes.

Shorten Contingencies.

By federal law, you have 10 days for inspections due to lead based paint, unless you waive that right in writing. Always get a home inspection, but tighten the time period so the sellers don't feel like they have to wait too long.  Leaving less time from offer to close, granted your lender can live up to the deadlines, is a great way to entice sellers

Write Your Best Offer.

Last word of advice-don't hope for negotiation. Offer your highest price and make it attractive, even a bit above list price if you know there are multiple offers. Ask your agent for a market analysis to determine pricing. Sometimes sellers deliberately set a price below comparable sales in an effort to generate multiple offers, so paying a little extra doesn't necessarily mean you are paying over market value.
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