In todays local real estate market, a simple purchase offer is not just about price. Savvy buyers know that crafting a unique offer can make the difference between getting that perfect home or losing it to another buyer.
Our local market is changing daily. Thats why its critical today to take the market pulse like a heart monitor. As your local specialist, our insider information is invaluable for buyers like you to nail down the final details no matter if this is a first home – or the next of many.
Buyers looking for a home in a sellers market need to be educated, savvy on home values, prepared to make a swift and compelling offer, plus they must know how to stay cool and not over-pay should a bidding war erupt.
From experience, here are some essential tips to craft a purchase-offer that can make you a proud and happy new homeowner.
In the neighborhood where you want to buy, are you facing a sellers market (fewer homes for sale, more buyers), buyers market (many homes, fewer buyers) or a balanced market (number of homes about equal to number of buyers)? Having a clear understanding where you stand in the current market can help you be aggressive or compromising in shaping an acceptable offer for a particular home.
Our specific market data will be your guide:
How many months supply of homes is available? Less than four months is a sellers market, more than six months supply is a buyers market, and in between is a balanced market, as defined by the National Association of REALTORS.
What is the current trend of home-selling prices? Knowing prices are rising or falling can help you not over-pay. Paying too much risks a low appraisal that could kill your deal.
Sales-price-to-listing-price is another key percentage. If homes are selling at listing price, buyers face a sellers market. On the other hand, if the sales-price-to-listing-price is a wide spread, buyers may find sellers more willing to accept a lower price than no offer at all.
Why is the seller selling? Moving up? Relocating? Downsizing? Estate sale? Is the seller underwater or does he or she have so much equity that price is not paramount? The more you know about the sellers situation, the more you can tailor your offer details to meet the sellers needs. Often, what is most important to the seller is revealed in counteroffers and negotiations. Buyers can respond with attractive terms while adjusting other details more important to them than to the seller.
Remember: A smart offer comprises more than the bottom-line price. Sellers examine the entire contract to weigh a buyers net offer. Is the buyer asking for closing costs, special accommodations, requests for items in the home and so on? These little extras can cost the seller money and can make a buyers offer look less inviting because the offer price is ultimately being chipped down, little by little, compared to offers with no special requests.
Buyers who want their offer to stand out are flexible on closing dates. If you really want a particular home, whether you get it in three weeks or three months may not make a huge difference to you. Sellers have their own schedule, and if you can adapt to that schedule, your purchase offer (if all else is equal) will have an advantage. Avoid the temptation to ask to move in early, delay closing or change any normal schedule that would lessen your chances of having your offer accepted – especially if other offers are available that don’t request such accommodations.
In an ideal world, sellers prefer a clean contract: full price, all cash or pre-approved financing, few to no contingencies or inspections, flexible closing date. In short, the fewer hang-ups in the offer, the better. Financing delays can derail a contract, which is why many sellers prefer buyers with mortgage pre-approval. Offering to have various inspections (home, pest, radon, energy, etc.) done during the first days after offer acceptance also makes your offer more appealing.
Earnest Money (Deposit)
The amount of money you offer with your purchase contract also indicates how committed you are to buying that particular home. The larger the earnest money deposit, the more you look like a serious buyer. We will guide you on local practices.
Days On Market
Sellers new on the market with a price set by recent comps may firmly stand by their price and terms compared to a home thats been on the market for some time. An offer right after a home has been listed could also be in competition with multiple offers – and todays buyers need to know how to make their offer stand out to win.
If the home is vacant, you may have a little more bargaining power than on a home thats still being lived in. If a vacant home means the owners have already moved on and are carrying the costs of the home while living elsewhere, you have a bargaining advantage. Buyers may be able to get special accommodations (including a lower price), but if the market is tight and homes are selling quickly, its less likely.
Depending on local custom, appliances may or may not be included with the sale. Specifying exactly what personal property is included or excluded with the sale is important. Smart buyers sometimes request property to convey in their offer but later sacrifice that fridge, chandelier or play set in exchange for gaining another point that bridges a last gap, such as price.
If you face stiff competition from other buyers, consider a personal appeal to the seller. Sometimes a heartfelt, handwritten letter – sharing how you’ve fallen in love with the home because it is perfect for your family and ideal for your personal circumstances – can make a difference with the right seller.
To craft the best offer, buyers benefit from working with top local real estate professionals like us. We can help you put together the perfect purchase offer – and counteroffers – to guarantee you end up with a great purchase agreement that saves you money and time.
We hope this information was helpful in your journey to purchasing your home. If you have any questions, don’t hesitate to contact us directly. Thank you, Moderno Realty