Tips For Competing in Hot Sellers Market and Multiple Offers
In a strong real estate market, the fear of having to compete with multiple offers might deter some homebuyers from making an offer on their dream house. No buyer wants to be caught off guard buying in a seller’s market, where the buyers outnumber the sellers. A hot seller’s market can make it very difficult, if not almost impossible, to buy the first home you want to buy. Here are eight ways to competing in seller’s market.
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Get pre-approved for mortgage
Having your loan pre-approved with full underwriting approval will give you the strength and confidence in this market that you can close quickly. A full underwriting approval means every aspect of your credit profile is verified and signed off by a mortgage loan underwriter, leaving only the property related conditions to be cleared before you are clear to close.
Bigger earnest money
Your earnest money deposit is the amount of money you submit with your offer. Once your offer is accepted, then the money will go toward your down payment once you close. A larger earnest money deposit might look attractive to a seller weighing multiple offers. Consider doubling or tripling the earnest money to show them you are serious about purchasing the house. You’re going to pay it anyway at closing.
Find out the sellers want
Finding out what terms the seller is looking for can help you to give them what they want. For example, maybe they are trying to sell the house in a hurry because of financial needs, or they are moving out of state for new employment opportunities.
Make a bid over the asking price
If you really love the house and you have flexibility to offer over asking price, then do it. While it’s not recommended that you pay for anything that’s over your budget, if you able to offer little bit more, you will have a better chance at beating out the competition.
Offer to pay seller’s closing cost
Seller’s closing costs are all of the fees associated with completing the sale and transfer of a home. Typical seller’s closing cost are owner’s title policy, loan payoff costs, recording and settlement fees. When buyer is competing for offer, buyer can offer to pay part of the seller’s closing cost, in order to make your offer stand out.
Include an escalation clause to your offer
An escalation clause allows you to make the higher bid no matter what because it authorizes your real estate agent to offer a certain amount of money such as, for example, $5,000 above the highest bid that the seller receives.
Be flexible
The more flexible and accommodating the buyer is, the more a buyer’s bid will attract the interest of the seller. Simple things such as being accommodating with the closing date or offering to rent the house back to the sellers while they continue to hunt for their new home.
Make your best offer
If you love a house, are serious about buying it, and know there are other buyers interested, don’t waste time trying to negotiate. Make your best offer. Be upfront with the seller and give them your best offer right off the bat. This helps show the seller you are serious and are ready to get the deal done.
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Swee Ng, Realtor and Phoenix East Valley resident specializing in win-win real estate transaction through great communication and fighting for his clients’ best interest. After all, this is more than real estates, this is about your life and your dreams.
If you are looking to buy or sell your home in Phoenix AZ and surrounding area, we hope you will consider us. Contact us today for complimentary consultation.
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