Making An Offer In Today’s Market
With a record number of potential homebuyers unable to get an offer accepted, many people wonder what it takes to win when making an offer in a seller’s market. If you have had trouble with making an offer or getting on accepted, do not feel stressed. You are not alone. In reality, it is hard to navigate a seller’s market, especially one that is this strong. Whether you are looking to make your first offer, or your fifth, there are some steps you can take to stand out. Here we will give you a few easy tips to help you stand out and rise above your competition.
Knowing Your Budget
One of the most critical parts in making an offer is being pre-approved. While pre-approval and pre-qualified are different, (see our real estate terms for the difference), a pre-approval letter is a great start. A pre-approval letter from a qualified lender will allow you to begin looking at homes that will be in your price range. This is one of the most critical steps to success in getting an offer accepted as a homebuyer. The best way to know your budget is to work with your lender and get you pre-approved. Freddie Mac puts it like this:
“This pre-approval allows you to look for a home with greater confidence and demonstrates to the seller that you are a serious buyer.”
With inventory at the lowest levels ever, being ready to move is a major key in the offer period. Because of homes selling at record paces and in record-low time, being ready can help you stand out. According to NAR, and research we covered in yesterday’s article about homes sales, 83% of homes sold in November were on market for 18 days. With houses selling so quickly, staying prepared and ready to act after getting your offer approved is important. Seller’s want to see that buyer’s are serious and will not want to wait to move in or close.
Use Real Estate Professionals When Making An Offer
There is no way around it. Real estate professionals know the market better than almost all everyday homebuyers. While some may be into real estate and know the market trends, real estate professionals know how to get offers accepted. Having a real estate professional in your corner will make sure everything is squared away and that you are understanding everything you are getting yourself into. Freddie Mac notes:
“The success of your homebuying journey largely depends on the company you keep. . . . Be sure to select experienced, trusted professionals who will help you make informed decisions and avoid any pitfalls.”
Long story short, real estate professionals are the experts. They do this everyday and are able to guide you through the real estate process. Not knowing how to write an offer will dramatically decrease your likelihood of getting an offer accepted. While you may feel like real estate agents only want a check, many of them are in it to help people live their homeownership dreams.
Making An Offer That Is Fair
Based off information from the Realtor Confidence Index, over 40% of all offers in 2021 were above list price. With a competitive market that does not look to slow down, emotions may get in the way. With seller’s still owning the upper hand, it is important to offer a strong but fair offer. Make sure you are using a real estate professional in order to make these negotiations and offers more attractive. Understanding the local market and recent market trends also will give you an upper hand in making a fair offer.
Be Flexible Making An Offer
Finally, you need to be willing to be flexible. This doesn’t mean going 10k above your best offer, or settling for a house you don’t want. However, being able to negotiate with your offer will help get an offer accepted. While being flexible may seem like you are settling, it is not always the case. Being flexible in real estate means you are willing to negotiate and find somewhere in the middle you can both agree on. Being flexible is not just waiving all your contingencies, especially an inspection contingency. Freddie Mac makes it clear that you should not waive your inspection. In fact, Freddie Mac says:
“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.”