Being A Buyer In A Sellers Market

Dated: March 26 2015

Views: 338

Buying a home in general is a major decision and is very stressful as well. Now sprinkle in the fact that houses are selling like hotcakes and you feel as though you are competing for the last seat in a high stakes musical chairs competition!

This year, I have written 24 offers and ALL 24 have been in a multiple offer, highest and best scenario where we are competing with other agents, investors, or buyers for the home. I tell you this because you CAN win the competition without mortgaging your future (no pun intended, especially since some of you are indeed obtaining a mortgage for your home!!!).

Here are some OTHER things that you may have to offer without breaking the bank and to get your offer to stand out:

1. Relationship with the seller or listing agent. The easiest and cheapest way to win a bidding war is by your rapport with the seller or your Realtor's rapport with other agents. Agents on the Troy Walseth Team go out of their way to speak with, meet, and build long-lasting relationships with other Realtors in the area for this reason! If I know the listing agent well, have had pleasant past transactions or experiences with them, and they know I follow through with what I say I am going to do, they may advise their seller to accept your offer, even if it's not the highest one.

1. a) In certain occasions, it may be wise to write a personal letter from your buyers to the sellers introducing themselves, explaining why they want the home, talking about family and children, or about why the seller's home is a perfect fit for them. A few tugs on the heart strings never hurt...

2. Financing. While not always in your buyer's control, strong financing is or should be the #1 concern for the sellers and listing agent. If there are 5 offers that are the same or very close to the same and only one of them is a cash offer, cash is king... A cash offer is not contingent upon an appraisal, a survey, certain inspection guidelines, and usually has a faster closing date available. Cash offers, even if slightly lower than financed offers, are the strongest offer you can make. Next up, if cash is not an option, conventional financing is next up. With a good, well-prepared lender, you can compete with cash offers. Some lenders, like my guy Tim Szumigala at Movement Mortgage, can provide your clients with a LOAN COMMITMENT LETTER rather than a pre-approval or pre-qualification letter. With the right documents, your loan can be approved and underwritten BEFORE you even make an offer on a house! All techical jargon aside, if you work with a smart, creative lender, you can still compete with an all cash offer!

3. Inspection. Almost all contracts are contingent upon a satisfactory inspection of the home taking place. Contracts in Florida allow up to a 15 day window where you are able to walk away from the house and contract without penalty for doing so if you are not happy with the inspection results. From a seller's perspective, these 15 days are a nerve-racking time period that allows the buyer to negotiate, look for other property, and walk away from purchasing their home. The shorter the inspection period (within reason) the better it looks to the seller. ***Do not put yourself in a position where you could lose your escrow money if an inspection comes back and makes you want to actually walk away from the house. Make sure the inspection period is long enough to allow you to properly check the house for major problems***

4. Escrow Money. Escrow money is the amount of money you give to the seller's title company to show that you are "earnest" about moving forward with the transaction. If you decide, after your inspection period of course, that you want out of the contract you risk losing your escrow money. If you are sure you want to buy the house AND feel you can get inspections done in a timely manner, then you can INCREASE the amount of money you put into escrow to show the seller and other real estate agent how serious you are about moving forward. You could also put an initial escrow money deposit when the contract is accepted AND another escrow money deposit once inspections are complete to protect yourself further.

5. Closing Date. Again, if you have the ability or flexibility to work with the seller's time frame, then you may want to ask what their preferred date of closing is and get as close to accommodating their needs as possible. The seller may have a tight window to close this house and find or move into another house so the more simple you can make the transaction for them, the more enticing your offer looks.

Summary: In the same train of thought, a seller wants to get the most money in his or her pocket, with as few contingencies as possible, and wants to make the stressful process of selling their home simple and easy. If you are flexible and prepared, you can win the dreaded bidding war!!!

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