The purchase of a home in a seller’s market doesn’t need to be challenging. Some preparation and a strategy could give you an edge over other prospective buyers and enhance the chances of you getting your offer accepted by a seller.
5 Suggestions for The purchase of a Home in a Seller’s Market
1. Get lender pre-approval or pre-qualification. Determine your loan options and have a pre-approval letter from a lender before you start the home search. Some homes are going under contract within days, or even hours, so having the ability to move quickly with financing can be a plus. The letter provides you with an understanding of how much home you can afford – so you’re able to easily eliminate homes not within your budget – and lets sellers know you are vetted financially. Remember, being pre-approved isn’t going to guarantee a mortgage – be ready to research options and rates with various lenders or work with a mortgage broker.
2. Be open to close as fast as the seller requires. A seller seeking to close within 30 days most likely is not enthusiastic about an offer from a buyer who also has a home to sell prior to closing on a new one. Offer more earnest money.
3. Earnest money, typically 1% to 5% of a purchase price that eventually goes towards a down payment, is held in escrow until a sale closes. Offering more earnest money, you’re letting the seller know that you’re a committed buyer.
4. Make your very best offer. In a seller’s market, it is likely you won’t be able to present an offer that’s under the asking price. If you love the house, present the seller with your best offer price.
5. Include an escalation clause. If you want your offer to compete with multiple offers, consider having your real estate agent include an escalation clause. The clause details how much you’re willing to pay over competing offers. Including an escalation clause in your offer is an additional way to show a seller that you’re a serious buyer.
Still unsure the way to navigate the real estate market as a buyer? The proper home begins with the right agent. When asked to name a real estate brand, RE/MAX is the name people name first.*
So give Nick, Cindy or Nicholas Davis with RE/MAX Premier Group a call and let us get started finding you, your new home.
* Source: MMR Strategy Group study of unaided awareness<