While the wild ride that was the â€˜unicornâ€™ years of housing is behind us, todayâ€™s market is still competitive in many areas because the supply of homes for sale is still low. If youâ€™re looking to buy a home this season, know that the peak frenzy of bidding wars is in the rearview mirror, but you may still come up against some multiple-offer scenarios.
Here are a few things to consider to help you put your best foot forward when making an offer on a home.
Rely on an agent who can support your goals and help you understand whatâ€™s happening in todayâ€™s housing market. Agents are experts in the local market and on the national trends too. Theyâ€™ll use both of those areas of expertise to make sure you have all the information you need to move with confidence.
Plus, they know whatâ€™s worked for other buyers in your area and what sellers may be looking for in an offer. It may seem simple, but catering to what a seller needs can help your offer stand out. As an article from Forbes says:
"Getting to know a local realtor where youâ€™re hoping to buy can also potentially give you a crucial edge in a tight housing market."
Having a clear budget in mind is especially important right now given the current affordability challenges. The best way to get a clear picture of what you can borrow is to work with a lender so you can get pre-approved for a home loan.
Thatâ€™ll help you be more financially confident because youâ€™ll have a better understanding of your numbers. It shows sellers youâ€™re serious, too. And that can give you a competitive edge if you do get into a multiple-offer scenario.
Itâ€™s only natural to want the best deal you can get on a home. However, submitting an offer thatâ€™s too low does have some risks. You donâ€™t want to make an offer that will be tossed out as soon as itâ€™s received just to see if it sticks. As Realtor.com explains:
â€œ. . . an offer price thatâ€™s significantly lower than the listing price, is often rejected by sellers who feel insulted . . . Most listing agents try to get their sellers to at least enter negotiations with buyers, to counteroffer with a number a little closer to the list price. However, if a seller is offended by a buyer or isnâ€™t taking the buyer seriously, thereâ€™s not much you, or the real estate agent, can do.â€
The expertise your agent brings to this part of the process will help you stay competitive and find a price thatâ€™s fair to you and the seller.
During the â€˜unicornâ€™ years of housing, some buyers skipped home inspections or didnâ€™t ask for concessions from the seller in order to submit the winning bid on a home. An article from Bankrate explains this isnâ€™t happening as often today, and thatâ€™s good news:
â€œWhile the market has largely calmed down since then, sellers are still very much in the driverâ€™s seat in this era of scarce housing inventory. Itâ€™s not as common for buyers to waive inspections anymore, but it does still happen. . . . Itâ€™s in the buyerâ€™s best interest to have a home inspected . . . Inspections alert you to existing or potential problems with the home, giving you not just an early heads up but also a useful negotiating tactic.â€
Fortunately, todayâ€™s market is different, and you may have more negotiating power than before. When putting together an offer, your trusted real estate advisor will help you think through what levers to pull and which ones you may not want to compromise on.
When you buy a home this summer, be sure to work with a real estate advisor to make your best offer.