Let’s be honest: This market is absolutely bananas. Buyers of all backgrounds are coming out of the woodwork to throw competitive offers on any home that seems nice. There are more Cali buyers with cash in hand than we’ve seen in a long time. Just last week, our team was involved in a multiple-offer situation where we had to compete against 40 other offers. What types of things are we doing to help our clients be as competitive as possible and win out in this red-hot seller’s market? How do you play to win?
1. Make your best offer first. There’s no time for games, and waiting for counteroffers isn’t an option. If your offer on a reasonably priced home in good condition is below the asking price, you literally have no chance of winning. All the decent houses that are moving on the market are getting exactly what they’re asking for, if not well beyond that. (In some cases, we’re seeing homes sell for substantially above asking price). It’s still more than possible to get into a home that you love, but if you think you’ll be able to negotiate some sort of killer deal, you’re in for a world of hurt. Remember: The market being against you doesn’t make a home a bad investment. Historically speaking, real estate always appreciates over time.
2. Make sure your financing is secure. Before you even start searching for homes, you need to speak with a lender and get all your financial ducks in a row. You need to make it clear to sellers that you’ve done your homework already and are highly qualified.
3. Be strategic in what you ask for in the contract. Price isn’t the only term that matters. The seller will compare your offer against a handful of others. Depending on their circumstances, they may be putting a premium on an accommodating move-out date, a longer escrow period, or the ability of the buyer to bridge the gap between sale price and appraised value. Try as best as you can to cut the fat in your offer; are there any contingencies that you’re comfortable with eliminating? The fewer strings attached, the better.
4. Write the seller a letter. Though it may seem a tad cheesy, it’s on this list for a reason. Buyers have found success with this approach in the past, especially in scenarios where they are competing against offers that are similar to theirs in price and terms. Going the extra mile and including a thoughtful, personal touch can help the seller differentiate between parties in a transaction and real-life people. Never forget that selling a home can be just as emotional as buying one; the seller wants the home to go to a deserving person or family.
In the letter, tell them how much you love their house and what it would mean to your family to live there. Just be aware that there are sellers out there who are unashamed to admit that they’re just after top dollar, so they won’t care about a letter. But ultimately, this strategy can never hurt!
Hopefully, this list empowered you as a buyer and also gave you some direction. It’s tough out there, but not impossible. If you have further questions about competing in today’s market or any other real estate topic, don’t hesitate to reach out to us by phone or email. We’d love to hear from you!
