Brutal for Buyers! How to get your offer accepted in this crazy Real Estate market.
Brutal for Buyers! How to get your offer accepted in this crazy Real Estate market.
Unless you’ve been under a rock, you’ve probably heard that it can be very difficult to purchase a home these days. Even as interest rates creep up from record lows, buyer demand remains strong and the supply of homes is at a record low.
In Southwest Missouri, where we tend to be insulated from the extremes seen in heavily populated coastal areas, buyers are still put through the wringer often having to write offers on multiple properties before they finally get home. That said, our team has a great track record and we can still boast that the majority of our buyers only write one offer. Proof that your agent matters.
There are a lot of moving parts in a real estate deal, which means that there are a lot of ways to sweeten your offer without throwing excessive amounts of cash at it. That said, I would be negligent not to to say that the more cash you are able to bring to the table, the more creative we can be in writing strong offers.
Know your numbers. The first step in buying a home remains the same but is doubly important in tense multiple-offer situations where emotions can dominate. Know your numbers and stick to them. If you are using a loan, make sure you know what payments will look like at the top of your price range, and get a closing cost estimate. This information will be crucial as you write your offer.
Find an experienced agent. I hate to discourage people from giving new agents a chance, but I’d hate to be a rookie in this market. The more contracts that your agent has seen, the more they understand, and the better their agent relationships are in the market the better off you will be. Oftentimes, a seller will be left choosing between two or three very similar offers. The manner in which your agent communicated with the listing agent when scheduling the showing, writing the offer, and delivering the offer could literally be the deciding factor. “Ms. Seller, offers A, B, & C are virtually the same. I can tell you that agent A is difficult to work with, agent B has done a terrible job with the paperwork, and agent C seems nice and their file is well organized.” I’ve actually had this conversation with my clients. Make sure your agent plays well in the sandbox.
Waive repairs. I don’t like suggesting this, but, unfortunately, it is often what is needed to get an offer accepted these days. Nerdwallet.com does a great job of discussing this in depth.
Waive appraisal or offer an appraisal gap. Another item that I hate to suggest, but it is often necessary. My preferred method is to write the following in special agreements. “Buyer agrees to pay up to $X over appraised value but not to exceed agreed upon purchase price.” This means, that if the contract price that everyone agreed to is $400k but the appraisal comes back at $385k, then the buyer agrees to pay $385k + $X. It's important to understand that this will increase the amount of money that you have to bring to the table. This is one of the many reasons why it is important to know your numbers. US News and world report do a great job discussing appraisal waivers here.
Use a local lender. Realtors want to be able to meet your lender face to face and hold them accountable if things go wrong.
Get creative! There is a lot of ways to sweeten the deal without adding to the purchase price or throwing exorbitant amounts of cash at it….stay tuned for our next blog where I will go into some of the most creative terms that we’ve used to get clients under contract!
As a bonus see our infographic below that walks you through the basics of buying a home. It feels a little over-simplified these days, but it does a good job of laying out the basics of the process.
