Monday, May 10, 2021 / by Jay Lesko
The number one issue plaguing our buyers is the constant compete situations they find themselves in. On average, our buyers are competing with 5 other offers. So what can a buyer do to win in this highly competitive market? Here are some tips to get you into your next home.
Make a Statement
Your offer is a reflection of your seriousness as a buyer. We have been advising our clients to submit "clean offers", which have few if any contingencies. As a buyer, you have to do what you feel comfortable with, but in the end the more "outs" you have within a contract places greater risk on the seller. When buyers ask me, "Do you think they would accept this offer?", I respond "If you were the seller how would you respond?" The reality is there is always a buyer willing to do whatever it takes to get the deal done. They realize and have accepted the market demand. They have likely been through losing a few offers as well.
Opt for a Home Warranty versus a Home Inspection
The average home inspection in our market costs about $500. For practically the same price you can purchase a one-year warranty from America's Preferred Home Warranty that will cover structural and mechanical components of your new home. By opting for a home warranty you forego the home inspection contingency and create a cleaner offer. You end up mitigating your risk as well as the risk to the seller.
Pay Cash and do a Cash-out Refinance
We don't all have a bankroll, but if you do consider paying cash. Once settled, you can apply for a cash-out refinance if you intended to carry a mortgage. This will give you a leg up on your competition for sure. Contact Ed Stratton from Stratton Mortgage of First Home Bank to learn more about this process.
Plan on going 10% - 15% over the asking price if you really want the property
I've been encouraging my buyers to limit their home search to 85%-90% of their original max budget. This enables them to get competitive when needed. It's likely that every home you see as a buyer will have multiple offers; so you need to be prepared to compete before you even find that perfect home.
A quick close is music to the ears of a listing agent. Outside of contingencies, time is the one variable that can have dramatic effect on a deal. A deal that closes in 30 days versus 45 or 60 takes a element of risk out of the equation for the seller.
Our agents at Iron Valley Real Estate know what it takes to compete in this highly competitive market. Reach out to one of them today to get more information.