March 5, 2021
4 MINUTE READ
If you’re in the market to buy a home, you’ve no doubt heard that we’re in a seller’s market, which is when there is a surplus of buyers competing for a low inventory of current listings. Making a strong offer to buy a home is imperative.
When a seller’s market exists, it is not uncommon for homes that require significant improvements to sell for asking price — and for an updated home with all the luxuries to receive offers from multiple buyers, which can lead to a bidding war and the home selling for far above the original asking price.
Of course, price isn’t everything to a seller. There are a number of other factors that most sellers will take into consideration.
If you’re trying to buy a home in a seller’s market, let’s take a closer look at these 5 tips to help you make a strong offer to buy your dream home.
It sounds simple, but a preapproval letter from a lender saying that they’ve examined your credit and feel confident that you can afford to buy the home can carry a lot of weight with many sellers. It tells the seller that not only are you serious about buying the home (and have already committed to a lender), but that you are also qualified to make the purchase.
In fact, even when competing against a higher offer without a preapproval letter, your offer will still likely win.
Your real estate agent acts as a trusted professional in your real estate transaction, someone you can turn to for advice and who you can trust to act in your best interest throughout the process.
An agent who constantly combs the marketplace for available listings and who networks with other agents is more likely to get a lead on homes hitting the market before anyone else. Make sure you are working with an agent who has their finger on the pulse of the local market.
A healthy earnest money deposit conveys to sellers that you are a serious buyer — and that you’re willing to put your money where your mouth is. Sellers will often feel you are more committed to the purchase if you put down, for instance, a 3 percent deposit, rather than a 1 percent deposit. In other words, if you’re trying to buy a $400,000 home, don’t offer a $750 deposit.
Often, this can make a seller feel that you have nothing at stake, and could easily walk away from the transaction without making a purchase. In contrast, a deposit of $10,000 or $15,000 tells a seller that you are seriously committed to buying their home.
You can learn more about how Escrow and the earnest money deposit work in our latest blog.
If you’ve already spoken to your legal advisor, and if you feel comfortable risking your deposit, you can give your offer a leg up by considering waiving contingencies such as those for appraisals, loans, or inspections. Keep in mind that there is some risk involved in this strategy, though.
For instance, if you waive the appraisal contingency and the home ends up appraising for less than the sales price, you will have to come up with the difference in cash.
A personal letter to the seller, handwritten by you, will help your offer really stand out, even with multiple offers on the table. In your letter, you should explain to the seller why your offer should win, and why you love the home — in other words, appeal to his or her emotions.
Whether you’re just getting started or you’ve been through the home buying ringer, Reali’s got your back. Reali agents are experienced local agents who work with your best interest in mind at every step of the transaction. All of our agents are experts in the areas they serve — and would be happy to help with your real estate search.
Our real estate agents will support you through the entire process, from search to negotiations, throughout the paperwork process and close. Talk to a real estate agent today.