With housing prices rising and inventory remaining low, it is starting to look like a seller’s market. So as a buyer, how can you snag your ideal home? Top real estate agents from across the country share their secrets on how you can secure the home of your dreams in a low inventory market.
1.) Move Fast: Move quickly when your real estate agent tells you there is a home that has just listed, said Francesca Gianaris, RE/MAX Metropolitan Realty. Be prepared to make an offer right after you see the house; this is not a market for hemming and hawing…if you like the home act fast, said Marge Peck, Discover Arizona Real Estate.
2.) Go Above the List Price…But Set a Price Ceiling: In a competitive market a higher offer might be necessary, said Rob Levy, Keller Willliams. However, it’s important to know your financial limits. If the price crosses your price threshold, be willing to walk away, cautions Gary Malin, Citi Habitats.
3.) Use an Escalation Clause: Consider adding an escalation clause to your offer to surpass other offers (along with a request for proof of other offers), said Levy. GiGi Grant, Zip Realty offers an example:
“In the event other written offers are presented to sellers on or before acceptance of this offer, buyer agrees to increase their offer to the amount of the highest net* offer plus $_______, with total price not to exceed $___________ on the condition Sellers provide Buyers with a copy of the signed offer from the other party(s).
4.) Cater to the Seller: Don’t underestimate the importance of timing for the seller. They are usually juggling a sale as well as a coinciding purchase, and have both logistical and financial milestones to coordinate – not an easy feat! They fear ending up homeless or carrying two mortgages, so be smart about structuring your offer to make the transition smooth for them, said Katie Wethman, The Wethman Group, Keller Williams Realty.
Also, be willing to work (within reason) around the seller’s time frame and choose a closing date that is most convenient to them, said Malin. Consider delaying closing until the seller can find a new place to live, advises Andrew Schrage, MoneyCrashers.com.
5.) Create a Personal Connection with the Seller: If you have the chance to meet the sellers while previewing the home, try to establish a rapport. Sellers often want to know who’s buying their home, so show your excitement either in person, or include a hand written personal note in your offer, said Gianaris. Explain why the house is perfect for you and why the seller should consider your offer over others, said David McCarthy, Keller Williams. These letters can personalize the transaction and at the very least, make your offer stand out in the crowd, agrees Malin.
6.) Increase Your Down Payment and Earnest Money: Make a stronger offer by putting down the largest down payment you can afford, advises Gianaris. You can also prove your offer is serious by upping the ante of the earnest money (a deposit promised to the seller as a good faith measure-the money goes toward the down payment but is refunded to the buyer if the seller does not accept their offer), said Jennifer Ward, Cummings & Co. Realtors.
7.) Be Low Maintenance: Shorten Purchase and Sales Dates: Remember when the market is strong, there is always another bidder waiting to take your spot in line, so be mindful with your list of credits or repairs. If both parties are satisfied with the deal then there is no need to delay – get the house inspected as soon as possible, said McCarthy. If it is a really hot property do whatever you can to close the deal. This is not a time to bicker over small repairs that came up in the inspection; the seller may have a back-up offer that is very enticing and could kick you to the curb if they think you’re being too difficult, said Peck.
We hope these tips help you to find and secure your dream home! Are you looking to begin your new home hunt? Start your search here.