Tips for Buyers in Competitive Markets, Part 2
Last week we talked about the things you need to know to be a contender in today’s low inventory, high competition market. This week, part 2: 4 weapons that you can use to compete for, and win, the house of your dreams.
1. See your mortgage broker, credit union, or other loan expert. The absolute first step in this process is pre-approval, a process by which your finances and credit are scrutinized so you and your loan agent can agree on the maximum bid you can make on a home. Bring a letter of proof of pre-approval, one that details your loan-worthiness, with you to open houses, and of course, to the negotiating table. Sellers and banks both want to know the home will sell: In today’s market, buyers who have not been pre-approved don’t stand a chance against those who have.
2. Choose experienced experts for your team. You’re going into battle here, so you want well seasoned soldiers by your side. Find a local Realtor with good reviews (ZipRealty Realtors® are reviewed online, so you can actually see client satisfaction). Ask that person as many questions as you need to feel confident. Do the same with your loan team. A mortgage broker might be better set up to connect you to a lender than a bank, since the bank generally works only within its own company and a broker can sell your loan to anyone offering the best deal. Check also with credit unions where interest rates are sometimes better than traditional banks.
Ultimately, your loan officer and your Realtor ® are your strongest allies in the home buying battle, so choose them wisely.
3. Consider your contingencies. We do not recommend--even in the hottest markets in the country—making an offer on a home you have not had professionally inspected. However, if after inspection, you find out the issues with the home aren’t terribly serious, you have to decide if it’s it worth it to ask the seller to fix them. Other buyers might be more willing to let such things go if they really want the house. And obviously, the less the seller has to do, the better for the seller.
Clearly, serious issues like structural damage, rot, pest infestations or leaking roofs are different. Most buyers will want to negotiate on such problems. The decision you’ll have to make is how much DIY you are comfortable with, and whether after your offer you’ll have enough money left to address your concerns. If you’ve done solid research ahead of time about what common repairs cost, you’re in a better position to make this call.
4. When you are ready to make your offer, present it with care. Just as with any important document, your offer should be carefully proofread, with every needed signature placed. The strength of your financial position, the reason you love the house (think personal letter), clear and reasonable terms of negotiation--all of these factors improve the strength of an offer. Think about it this way: if you were a seller with several offers on hand and one of them were missing a signature, would you take the time to send it back to the would-be buyer… or simply move on to the next offer in the stack?
Consider also making the process quick. If you commit to a fast sale, a seller hoping for just that will find your offer most attractive.
Offers are long, tedious legal documents, but you owe it to yourself to read every word, dot every ‘I’ and cross every ‘T.’ In a way, the offer presents you to your seller, and you want to present yourself in the best possible light.
And after all, real estate isn’t just about money. It’s about human beings selling their homes to other human beings. Put a little humanity and personal touch into your approach. That, together with the expert guidance of a great Realtor®, will be your best weapon of all.
Anna Marie Erwert writes from both the renter and new buyer perspective, having (finally) achieved both statuses. She focuses on national real estate trends, specializing in the San Francisco Bay Area and Pacific Northwest. Follow Anna on Twitter: @AnnaMarieErwert