I have been a Real Estate agent for long enough (9 years) to see the good and bad, the slow and crazy markets. I have been there when we had a choice of any property, most of which had been on the market 60+ days and other times when you need to offer above list with your family Christmas picture for any hope to get your offer accepted out of the 10 that were submitted.
Right now (Spring 2015), I am sad to tell the buyers, but we are in the latter market. Every property is selling fast and at close to full price, regardless of the market segment. If the home is decent or is in the right school district or is priced right, it will sell often in the first week. Unfortunately, many buyers have not made that shift in their brain. They are still trying to find the distressed seller and offer them 20% below list price.
To be competitive as a buyer in this market, here are some of the tricks.
- Be quick to look at properties (within 24 hours of them hitting the market). Many houses are sold before the buyers even get out to see them on the weekend. Conversely, make sure to see the house before making an offer. Many sellers will not look at offers if they don’t see your name in the showings list.
- Make a decision quick and submit an offer. I realize that your parents or even your spouse may need to “approve” the house, but at least get your offer in and make your intentions known.
- If this is your family home, don’t be afraid to go old school and write a letter and enclose a picture of your family. Talk about how happy you would be in the house, how the kids will love the backyard and how much you will cherish the opportunity to live in the neighborhood. While some other buyer’s higher offer may trump your price, if all others are the same, this little extra touch may help you get that house.
- Put down a higher earnest money. These days $1000 seems to be the standard. Put $5000 or even $10,000 in your purchase agreement to show you are serious (make sure your agent mentions that to the listing agent).
- Most Agents just shoot over the offer to the listing agent with nothing more than their phone number. Have your agent make some bullet points about how qualified you are, the highlights of your offer in the body of the email with the offer.
- I may get some hate mail for this, but get a pre-approval from a reputable mortgage company. A letter from Wells Fargo seems more authentic than Zenith North Mortgage! While we know that Zenith may be an excellent company, using a name brand seems more credible. Ultimately, you can use whoever you want for the mortgage if you get the house.
- Keep your offer as clean as possible. Don’t ask for any repairs or personal property beyond the appliances. It just muddies the water and the seller’s may take offense at your requests or be annoyed that you asked them to cut down the dead tree in the back yard.
- Have your agent find out if the seller’s have any hot buttons or preferences. Maybe they want to be closed before the holidays. Maybe they would prefer to have the buyer purchase the hot tub. Maybe they would prefer to not repair the roof or furnace. Maybe they need/want a longer closing date to allow them to find a house. Playing into that need, may show flexibility that other offers don’t know or can’t accommodate.
- Make a full price offer. Everyone likes to get a deal, but if that is the house you want and the price is reasonable, why possibly lose the house over $2000-3000? That is less than a pizza meal per month in larger mortgage payments!
Moral of the story is that this is a tough market to be a buyer. Do everything you can to set your offer apart from others and get yours accepted.