Wayne Semprini's Blog
In a competitive housing market--like the one we have today--sellers are fielding numerous offers, especially in desirable urban and suburban hubs.
If you’re hoping to buy your first or second home, it can be tough to make offer after offer with no success.
However, there are some things you can do to help ensure your time house hunting is well-spent and to increase your chances of getting your offer accepted.
In today’s post, I’m going to give you a few tips on how to win a bidding war on your dream home.
The most effective way to ensure that your offer is accepted is to make it in all cash. Cash offers drastically simplify the real estate transaction process, making things easier on the seller.
Most buyers, especially first-time buyers, won’t be able to make an all-cash offer on a home. However, people who are downsizing after their children moved out or are buying a retirement home may find themselves in the ideal financial situation to be able to leverage a cash offer.
If that sounds like you, consider a cash offer as part of your bidding strategy.
Waive the financing contingency
If you’re new to real estate contracts, you might be wondering what a contingency is. Essentially, a contingency is an action that needs to be completed before the contract becomes valid and the sale becomes final.
There are a number of different contingencies that can be found in a real estate contract. However, the most popular are for inspections, appraisals, and financing.
If you’re planning on taking out a mortgage to purchase the home, a financing contingency protects you in case you aren’t able to secure the mortgage in time. In other words, you’re not on the hook for a home you can’t pay for.
In some special situations, buyers might decide to waive the financing contingency, signaling to the sellers that there won’t be any hang-ups or delays from the buyer regarding financing the home.
Waiving this contingency comes with risks (namely, being responsible for coming up with the money to pay for the home). However, there are ways to safely waive a contingency.
The most common approach is to get a fully pre-approved letter from a lender. The important distinction here is that your mortgage needs to be pre-approved and underwritten (not just pre-qualified), otherwise you again risk getting denied the mortgage in the last moments before buying your home.
Crafting a personal letter
Sometimes all it takes to win a bidding war is to be the seller’s favorite candidate. Take the time to write them a personalized letter. Explain what you love about their home and why it’s perfect for your family.
Avoid talking about big changes you’ll make. Remember that they probably put a lot of time and money into the home, making it exactly the way they want it, and won’t appreciate you making huge plans to undo their work as soon as they’re out the door.
Using one, or a combination of, these three techniques, you’ll be able to give yourself an edge over the competition and increase your chances of getting your offer accepted.
If you want to buy your dream house, you'll likely need to submit a competitive offer from the get-go. That way, you can boost the likelihood of receiving a "Yes" from a home seller and proceed along the homebuying journey.
Putting together a competitive homebuying proposal can be simple. Now, let's take a look at three tips to help you prepare a competitive offer to acquire your ideal residence.
1. Look at Your Homebuying Budget
Entering the real estate market with a budget in hand generally is beneficial. This budget will enable you to narrow your house search to residences that fall within a certain price range. Plus, your budget can help you define exactly how much you can offer to acquire a residence.
When it comes to mapping out a homebuying budget, you should meet with several lenders. These financial experts can help you get pre-approved for a mortgage. And with a mortgage in hand, you'll know exactly how much you can spend on a house.
2. Review Housing Market Data
Housing market data can make or break a homebuying proposal. If you assess real estate market data closely, you can uncover a variety of patterns and trends. Then, you can use this information to craft a competitive offer that accounts for the present real estate market's conditions.
Of course, it helps to evaluate the age and condition of a house as well. Learning about all aspects of a house will help you determine whether to submit an offer at, above or below a seller's initial asking price for his or her residence.
The more information that you obtain about a residence and the current housing market's conditions, the better off you will be. Because if you take a data-driven approach to buying a residence, you can define a competitive offer for any home, in any housing market and at any time.
3. Consult with a Real Estate Agent
A real estate agent is a difference-maker, particularly for a homebuyer who is uncertain about what differentiates a competitive home offer from a "lowball" proposal. In fact, a real estate agent will go above and beyond the call of duty to ensure that you can acquire a great house at the lowest-possible price.
Typically, a real estate agent will provide you with a wealth of housing market insights. He or she also is happy to teach you about the real estate market and respond to any of your homebuying concerns or questions.
A real estate agent can offer recommendations about how much you should offer to pay for a house too. He or she will provide honest, unbiased homebuying suggestions to help guide you in the right direction throughout the homebuying cycle.
If you want to purchase your dream house as quickly as possible, there is no reason to delay any further. Take advantage of the aforementioned tips, and you can prepare a competitive offer to purchase your dream residence.
Deciding whether to accept a buyer's offer to purchase your house can be exceedingly difficult. Fortunately, we're here to help you assess the pros and cons of a homebuying proposal and ensure you can make an informed decision.
Now, let's take a look at three tips to help you determine whether to accept an offer to buy your home.
1. Examine the Current Housing Market
The current housing market may play a role in your ability to stir up interest in your house. In addition, the real estate sector may impact whether you're able to receive multiple home offers at or above your residence's initial asking price.
To understand the present state of the housing market, you should look at the prices of recently sold houses in your city or town. If houses are selling quickly, you may be operating in a seller's market. Or, if houses linger on the market for many weeks or months before they sell, you may be operating in a buyer's market.
Ultimately, a seller's market may lead to many offers on your house in the foreseeable future. If you receive an offer that fails to match your expectations when you're operating in this type of market, you may want to decline or counter the proposal in the hopes of receiving superior offers down the line.
On the other hand, it usually requires hard work and persistence to sell a house in a buyer's market. And if you receive a competitive homebuying proposal in a buyer's market, you may want to accept this offer.
2. Consider Your Home's Condition
The condition of your house may prove to be a critical factor as you debate whether to accept an offer. If you assess your house's condition closely, you may be better equipped than ever before to make the best-possible decision about a homebuying proposal.
If you feel a home offer is fair based on the current condition of your house, you may want to accept the proposal. Conversely, if you feel a buyer has submitted a "lowball" proposal based on your home's condition, you should not hesitate to reject or counter this offer.
3. Consult with a Real Estate Agent
When it comes to evaluating a homebuying proposal, it generally is a good idea to collaborate with a real estate agent. This housing market professional can help you weigh the advantages and disadvantages of accepting an offer and determine the best course of action.
Typically, a real estate agent will present a buyer's offer to you and offer recommendations about how to proceed with this proposal. As you assess all of your options regarding a homebuying proposal, a real estate agent will be able to respond to any concerns or questions that you may have too.
Ready to take the guesswork out of reviewing a homebuying proposal? Use the aforementioned tips, and you can streamline the process of deciding whether to accept an offer to purchase your home.