5 ways to compete in today’s buyers’ market
Have you made an offer on a home recently only to find that somebody else offered more? Have you heard that it’s a buyers’ market, and then been surprised to discover that more than one offer was made on the house you wanted?
How can you compete and make sure you get the home you want in a competitive buyers’ market?
- Be patient. In a time when the majority of homes for sale are distress sales, either short sales or foreclosures, it can take time to hear back from the banks on their decisions.
- Be pre-approved. Make sure you are pre-approved, not pre-qualified. Your offer is likely to be reviewed by the current lender, and they will want to see a strong pre-approval. Get a desktop underwriting approval if possible. This means that your loan has actually been run through the computer underwriting system and has been approved.
- Be realistic. In many cases, the banks are making final decisions on the purchase price of a home. They are looking at the market value of the home when making a business decision about whether or not to accept an offer. If the market value is $750,000, they are not going to let the home go for $500,000 no matter how bad the media says the market may be. The banks may not be in the business of owning homes, but they are not in business of giving them away either.
- Be ready to make several offers before winning a home. Despite the fact that it’s a “buyers'” market, you may have to make offers on several different homes before having your offer accepted. I made an offer that was more than 6% over listing price on a home that had 15 offers in the first week, and that was not the highest offer. What made this home so attractive? It was a well-priced home in a nice neighborhood, and there is a lot of competition for this kind of property.
- Be sure to use a real estate consultant who can explain to you the realities of today’s market.