Buying a home right now can be very challenging. Many homes on the market are going for top dollar and often have multiple offers within the first few weeks - even days - of going on the market! Here are 6 tips to help you get the home you want in such a competitive real estate market. Read below for the tips, or watch the video below.
Tip 1. You may need to shift your mindset. This is not a market where you can be overly concerned about getting a great deal, or haggling. It's a seller's market. There are not enough homes for all of the buyers out there, so if you want a really good deal, you're going to have to go to Publix and do your BOGO there. Be prepared to pay full price if something is priced well - and maybe even over full price. It's a competitive market, so you may need to shift your mindset if you want to get the house you love.
Tip 2. Do your homework. I know this is a crazy idea, but have your realtor pick up the phone and call the listing agent. Ask them "What's most important to your sellers?" What you find out might increase your chances of having your offer accepted. Let me give you an example. I have some customers right now who are selling their home and the new home that they're purchasing isn't going to be ready for another 60 days. And so my sellers are not interested in a "fast close" - they want a 60 day closing. We just went under contract and that agent was smart - she picked up the phone and called me to see what was important to my sellers.
Tip 3. After your realtor calls, have them write up a very clean offer. And by that I mean, don't ask for anything out of the ordinary - just have your realtor read the MLS listing and see what conveys. Also, if you can help it, don't ask for them to pay for any of your closing costs - that effectively reduces the net proceeds to the seller.
Tip 4. Consider increasing your binder deposit. The binder deposit is the amount of money that you put down that becomes a part of your down payment - the money that you bring "to the table". So say a seller has a home listed for $300k. They receive two full price offers and one has a $1k binder and the other has a $3k binder. Well, this isn't rocket science, the seller is going to go with the one that has a higher binder, because that buyer has more skin in the game.
Tip 5. Write a personal letter. Ok, I'm going to tell you a secret now. Sellers wants to sell their home to someone they like! This is not a property that they're selling - this is their home! This is where they've made memories. And they want it to go to someone who can also love their home the way they did. And so make it easy to like you - write them a letter that talks about why you love the home - why is this a kick-ass home? Talk about the three things you love the most and really paint a picture of putting yourself in that home.
Tip 6. Consider using an escalatory clause. If you know or suspect that there might be other offers on the table, go ahead and have your realtor write up a full price offer (assuming the comps support it) and then use an escalatory clause that says that you'd be willing to beat any other offer that comes in by a certain amount up to a certain amount. Example - you write a full price offer for a $300k home. You can use an escalatory clause that says that you'd be willing to beat any other offer by $500 up to $310k. The agent has to produce proof of the other offer to you and it has to be in a defined time period. Using an escalatory clause is a great tactic when you don't want to put all of your cards on the table at once and want to leave a little room before coming up to the top price that you're willing to offer for a home.
Ok, so there you have it. Those are 6 tips that you can use to help you increase the chances of getting a home you love when the market is very competitive the way we're seeing now.
Heather Buckman, Broker/Owner
Cowford Realty & Design