It’s Purchase Season and a Highly Competitive Market. What Now For Buyers?

Although mortgage rates are at record lows, demand for homes creates a new challenge in 2021. This year has seen a large increase in demand for homes fueled by historic low rates. Now the average home buyer needs to offer ABOVE asking price, often by 10’s of thousands of dollars. Inventory is dwindling while prices and competition climb. Buyers have to prepare for the highly competitive market. But how? 

In a world where offers above asking are turned down and a dozen offers are made on a single property, buyers must put their best foot forward at all times to stand a chance. That means making a strong first offer. Depending on the market where one is buying, there may not be a chance to counteroffer. Buyers should give a solid initial offer. Yes, that may mean above asking. Today, the average house sells above asking.

Buyers should be prepared to offer above asking and get pre-approved beforehand. Because agents have a surplus of applicants, they won’t spend their time with buyers who aren’t already preapproved. One must show they are a serious buyer. This will save both the buyers and the agent time and energy. The offer should be clean. This includes avoiding seller concessions and asking for personal property. There’s a high chance a similar offer is on the table. It will make a difference if one offer has contingencies and the other does not. 

As stated before, it is a good idea to come in strong right off that bat. This isn’t always the right strategy, but in today’s market, it’s essential. There will be other offers on the table for the seller to consider. It may be wise to add an escalation clause to your offer. This tells the seller that you plan to outbid other offers on the table. 

The other, more obvious factors that help buyers are a larger down payment or an all-cash offer. This may not be an option for everyone and you can still be selected without doing so as long as you make yourself a desirable candidate. 

Lastly, write a letter to the seller. For some, this makes all the difference in the world. Tell them all the things you love about the home. Take a page out of “How to Win Friends and Influence People” by Dale Carnegie. Flatter them on specific details you enjoy, whether it be the renovated kitchen or lovely garden. People take pride in their homes and if they know you notice the love and effort they put into it, it may give you a leg up to a similar offer. Tell them why you want them home, what it will mean for you and your family, and the memories that will be created there. Tell them about the love and effort YOU would put into the home. It can bring the seller peace knowing that you will take just as good care of it as they did. People hold sentimental value in their homes. Sharing a letter that resonates with the seller could end up being the final factor that lands you a home. 

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