So Many Offers... How Do I Get The Home I Love?
1/27/2021
Whether you're in the market to buy a home or not, I'm sure you've heard many war stories told about the current housing market. If you are a buyer in today's market, you may feel like you're in the Hunger Games due to the low volume of listings, multiple offers on homes, and negotiations that even I cringe at.
Well, I'm here to take you out of the Hunger Games and bring you back to the safe space of smart home purchasing. Here's what I've been seeing...
Buyer wants to buy, which is fantastic. I encourage anyone who is wanting to own a home to buy now. The mortgage rates continue to be lower than I've ever seen, which gives the buyer more buying power. However, with the low inventory mentioned above, it is difficult to find and secure a home you love. You will need to see homes as soon as they hit the market, be ready to be decisive and put an offer in right away on a house you choose, know a multiple offer situation is a likelihood, and be ready to pay your own settlement costs. You must also try not to get too attached to the home you want to purchase. Of course, I will do everything in my power to make sure you have a fighting chance for that home. There will be many strategies we will use to put your best foot forward.
I'm not going to give away my strategies here, of course. But I will tell you a few that we all try to use.
1. Know the value of the home you're submitting an offer for. Before advising you to offer asking price or advising you on a certain amount over asking, I would do a Comparative Market Analysis (CMA). This is how we know the property's value on the market for listings- it helps to do our own on a home you are wanting to purchase to make sure the asking price is truly reflective of it's value on the market at that time. You will choose what you offer, but I'm there to advise you and take that seriously.
2. Know the seller's needs/expectations. When you find "the one", I always call the listing agent to see if there are any other offers put in yet on the home. I will ask them when the seller would want to settle on the home, if they are contingent on this sale to purchase another home, and ask if there is anything else I should know when writing your offer. Showing you care about the seller side of the transaction is important. It is not buyer vs seller in negotiations. It's team let's get this house sold and we'd like it sold to us.
3. Escrow deposit can be key. Your escrow deposit is the good faith earnest money that will be held in a non-interest bearing account and will be put toward settlement costs later. It may all be used for your settlement costs, but if not you get the rest of the money back at settlement. Normally, I advise the buyer to put 1% of the purchase price in the escrow account. With today's market, if you can, I'd recommend putting 2-3% of the purchase price into escrow. There are a couple of ways that can be done. We would discuss those, if need be, at this time. More money in escrow would be seen by the seller as a more serious commitment to the purchase of their home.
These three are some of the basic strategies we use when making an offer. There are many strategies I'm seeing buyers use that make me pause and wonder, though.
Here are a few things we would try to avoid, though it's your choice and I'm here for you whatever you decide.
1. Giving up inspections. While I wouldn't go asking for every inspection under the sun, unless we see something that warrants all of them (not likely), I would advise you to get a home inspection. Buying a home is one of the largest investments you will make in your life. It's important you know it's a sound investment. Many are giving up this right to an inspection to make their offer better than the others. There are other ways we can make your offer stand out. Anything you find after settlement is yours to deal with. I'd rather you find out about any issues with the home through inspection instead of having a surprise you have to pay for after settlement.
2. Offering far more than the home is worth (on the market). I've seen homes sell for $70,000 more than the list price. When a home is listed, it's usually listed at a fair market value. Yes, the prices of homes are trending up right now. However, if you have to move in a couple years for some unknown reason I can almost promise you the price of your home will be far lower than what you are paying for it. You will not have equity in the home for a very long time, which can set you back financially. It's far better to go up in price to where you feel it will still appraise properly and end up having to look for a new home because another offer was chosen, than end up with a home that's not a financially sound investment.
3. Giving up. Don't give up! This is where I sing a little Don't Stop Believing by Journey for my clients. Your new home is out there. You just have to have patience, trust me, and keep moving forward. If you didn't get the house you just wanted, it's because the right one is waiting for you. We just have to find it... and we will.
So, here's the good, the bad, and the crazy. When you are handed the keys to the home you have been working so hard for, all of this will seem like an adventure and will be totally worth it.
No more Hunger Games for you- call me if you would like help finding your new home. I'm always here for you. I'm always ready to get you home.
Well, I'm here to take you out of the Hunger Games and bring you back to the safe space of smart home purchasing. Here's what I've been seeing...
Buyer wants to buy, which is fantastic. I encourage anyone who is wanting to own a home to buy now. The mortgage rates continue to be lower than I've ever seen, which gives the buyer more buying power. However, with the low inventory mentioned above, it is difficult to find and secure a home you love. You will need to see homes as soon as they hit the market, be ready to be decisive and put an offer in right away on a house you choose, know a multiple offer situation is a likelihood, and be ready to pay your own settlement costs. You must also try not to get too attached to the home you want to purchase. Of course, I will do everything in my power to make sure you have a fighting chance for that home. There will be many strategies we will use to put your best foot forward.
I'm not going to give away my strategies here, of course. But I will tell you a few that we all try to use.
1. Know the value of the home you're submitting an offer for. Before advising you to offer asking price or advising you on a certain amount over asking, I would do a Comparative Market Analysis (CMA). This is how we know the property's value on the market for listings- it helps to do our own on a home you are wanting to purchase to make sure the asking price is truly reflective of it's value on the market at that time. You will choose what you offer, but I'm there to advise you and take that seriously.
2. Know the seller's needs/expectations. When you find "the one", I always call the listing agent to see if there are any other offers put in yet on the home. I will ask them when the seller would want to settle on the home, if they are contingent on this sale to purchase another home, and ask if there is anything else I should know when writing your offer. Showing you care about the seller side of the transaction is important. It is not buyer vs seller in negotiations. It's team let's get this house sold and we'd like it sold to us.
3. Escrow deposit can be key. Your escrow deposit is the good faith earnest money that will be held in a non-interest bearing account and will be put toward settlement costs later. It may all be used for your settlement costs, but if not you get the rest of the money back at settlement. Normally, I advise the buyer to put 1% of the purchase price in the escrow account. With today's market, if you can, I'd recommend putting 2-3% of the purchase price into escrow. There are a couple of ways that can be done. We would discuss those, if need be, at this time. More money in escrow would be seen by the seller as a more serious commitment to the purchase of their home.
These three are some of the basic strategies we use when making an offer. There are many strategies I'm seeing buyers use that make me pause and wonder, though.
Here are a few things we would try to avoid, though it's your choice and I'm here for you whatever you decide.
1. Giving up inspections. While I wouldn't go asking for every inspection under the sun, unless we see something that warrants all of them (not likely), I would advise you to get a home inspection. Buying a home is one of the largest investments you will make in your life. It's important you know it's a sound investment. Many are giving up this right to an inspection to make their offer better than the others. There are other ways we can make your offer stand out. Anything you find after settlement is yours to deal with. I'd rather you find out about any issues with the home through inspection instead of having a surprise you have to pay for after settlement.
2. Offering far more than the home is worth (on the market). I've seen homes sell for $70,000 more than the list price. When a home is listed, it's usually listed at a fair market value. Yes, the prices of homes are trending up right now. However, if you have to move in a couple years for some unknown reason I can almost promise you the price of your home will be far lower than what you are paying for it. You will not have equity in the home for a very long time, which can set you back financially. It's far better to go up in price to where you feel it will still appraise properly and end up having to look for a new home because another offer was chosen, than end up with a home that's not a financially sound investment.
3. Giving up. Don't give up! This is where I sing a little Don't Stop Believing by Journey for my clients. Your new home is out there. You just have to have patience, trust me, and keep moving forward. If you didn't get the house you just wanted, it's because the right one is waiting for you. We just have to find it... and we will.
So, here's the good, the bad, and the crazy. When you are handed the keys to the home you have been working so hard for, all of this will seem like an adventure and will be totally worth it.
No more Hunger Games for you- call me if you would like help finding your new home. I'm always here for you. I'm always ready to get you home.