In today’s seller market where inventory is extremely tight and many buyers are competing for homes, it is crucial as a buyer you have a game plan.
Below are important items to keep in mind to be competitive and to not over commit:
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Know your budget. Be prepared for potential bidding wars, but do not go beyond your means.
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Get pre-approved. Your offer may be dead in the water without a pre-approval. A pre-approval shows that a bank has done an initial vetting of your financial information and is indicative of what you can afford.
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Show proof of funds. Sellers will want to see proof of funds in addition to your pre-approval letter to make your offer competitive.
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Be flexible to the seller’s needs where possible. If the seller needs to find another house as a contingency, be willing to accept this.
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All cash offer. If you have a means to come in all cash and waive certain contingencies that are crucial for financing (i.e. appraisal) and to close the deal quick, this will often win out. Financing after the fact is an option, however, not all buyer’s have this luxury.
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Write a letter to the seller as part of your offer. Explain to a seller why you would love to purchase their home and how you envision living in it. Establishing an emotional connection may win out.
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Hire a realtor that does their due diligence. Having a good realtor who knows the local market, competition, and what could drive the success of the transaction is key. Also having one who performs their fiduciary duties and knows when you should walk away to make sure you are getting an equitable deal.
Seller’s are currently in the driver seat and market’s do change, but as a buyer right now in a market with low interest rates and inventory on the market, you need to know how to stand out from the crowd.