How to be a successful buyer in today’s seller’s market

Inventory is low, demand is high. That means it’s a seller’s market. Bidding wars are becoming common. You need to have a strategy in place if you want to edge out the competition for your dream home.

Let’s map out a plan of attack.

1.) Show your ability up front to afford the transaction.

*Obtain a pre-approval letter from a lender stating you have the capacity to afford the loan you need.
*Cash is king. The vast majority of buyers don’t have this ability but paying in cash can give you a leg up on the competition by eliminating the risk of not being able to get a loan approved. If you do have the cash then be sure to have a redacted bank statement proving it.

2.) Determine what you want and where to find it.

*This is where you lean heavily on me. Let’s discuss your wants, needs and desires. Then let my local knowledge pinpoint those areas to focus your search and set up the showings.

3.) When you find the house you want, don’t wait to make an offer.

*In a seller’s market, you snooze you lose! In desirable neighborhoods, homes sometimes stay on the market only hours or a few days. If you want the house, why wait until the next day to make an offer? They may be someone ready to scoop up the house while you are still thinking about making an offer.

4.) Make a strong offer.

*Don’t low-ball just because you don’t like the counter-tops or the color of the paint.
*I’ll use comparative market analysis data to guide your offer. I’ll also check the recent list-to-sales price ratios.
*If there is competition for the property then you may need to offer full or close to full asking price. If a bidding war erupts then be prepared to pay over the asking price if you really want the house.

5.) Don’t be stingy with the Due Diligence Fee and the Earnest Money Deposit.

*Due Diligence period, generally 30 days, with the closing usually about a week later, is when you make sure your loan can be underwritten, your inspections and appraisal done, and any questions answered in order to determine that you want the house. The fee is paid to the seller in order for them to take the house off the market while you do your due diligence. You are buying time. The fee becomes part of your down payment on the house should you decide to go forward. If you back out for any reason or no reason during due diligence then the fee is forfeited to the seller for compensation of lost time on the market.
*The Earnest Money Deposit is a larger fee which is essentially a down payment on the house. This check is made out to the closing attorney and held in their trust fund. This money comes off your bottom line at closing. It can only be refunded if you exit the deal before the end of due diligence.
*I can guide you on setting these negotiable amounts.

The key here is to be first, if possible, to get an offer in and under consideration. The offer should be strong so that there may be only one, or no, counter-offer from the seller. Once all sides have agreed and signed and communicated the signatures to the offering party you have a deal! Now on to inspections, appraisals, survey, etc., and hoping all runs smoothly resulting in you closing on the house.