Buyers: How to Beat the Rush and Make a Quick Offer on a Home for Sale
We’ve written a whole bunch of posts recently that address the inventory shortages nationwide and the return of bidding wars to the most desirable housing markets. If you are looking to buy in one of these especially competitive neighborhoods, it’s all the more important that you’re ready to act when you find a home you love, and act quickly.
Have you studied hard?
Before you’re out touring homes for sale seriously, you should have a good idea of:
· what kind of home you’re looking for – basics such as beds and baths as well as your non-negotiables (i.e., not a fixer-upper, not on a busy street, etc.). Don’t get talked into a “good deal” on a home that does not fit your basic needs. Your idea of what you want might change, but you need to be able to quickly identify top contenders.
· what homes are selling for in your neighborhood – you can get a basic idea of comparables by looking at other homes in your neighborhood that have similar features. Know the basic price point, what constitutes a “good deal” in the neighborhood (so you can act quickly!), what the price history of the home is, etc.
· what you need to make an offer – talk to your real estate agent or to other homeowners about how the offer process works and about what is included in an offer: purchase price, earnest money, contingencies, conveyances, concessions, and timeline.
Ideally, these are things you think through as you’re beginning the home buying process. If you’re already out looking at homes, make sure to do these ASAP so you’re ready to go!
Do you have your ducks in a row?
· consider what kind of loan and down payment you’ll have – it’s really in your best interest to get preapproved for a home loan, so you can stick to a price range and have a good idea of how much room you have to bid over the asking price. Know your limits.
· consider potential outcomes – you can’t predict what will happen during your offer process, but try to imagine how comfortable or willing you would be to waive contingencies or to get involved in a bidding war. Think through these situations while you’re level-headed and calm, not when you’re desperately trying to win the home.
How far are you willing to go?
In addition to knowing your financial limits and your non-negotiables for what you want in a home, there’s another slightly controversial strategy out there that will really help you beat the rush: the pre-emptive offer.
“A pre-emptive offer is an offer that's made before the seller's designated date to hear offers, or before the property is exposed to the market. In this situation, the buyer writes an offer early and insists that it be presented to the sellers. The sellers don't have to respond. But state law may require that any and all offers be presented to the seller.” (Inman)
Unfair, right? Well, yes. If you decide on this strategy, you and your agent will probably upset other prospective buyers. Plus, you’ll need to make an offer that the seller cannot refuse in order to win the home.
The pre-emptive offer is not for the faint of heart or the low on cash. You need to offer fast and offer a great deal over asking – how much over will depend on your particular market. As always, talk to your real estate agent if you’re interested in employing this aggressive home buying technique.
Sarah Louise Green lives in the San Francisco Bay Area and writes about national real estate trends, home financing, advice for buyers, and DIY projects for the home and garden. Follow Sarah on Twitter:@slouisegreen