You’ve found your dream home. You are ready to make an offer, and it is a good one. You’re concerned because there are more buyers than houses being sold in this seller’s market. What should you do?
A seller might be tempted to purchase a home with cash. They’ll usually get their money faster and not have to do as many paperwork. This is something that many buyers can’t do. Here are eight tips to help you buy a house on a seller’s marketplace.
#1 Get a Preapproval Letter
You may have to think of creative ways to make an offer on a house that is in high demand. However, you must remember the basics. Make sure you have a preapproval letter to assure the seller that you are ready to close on a deal.
#2 Have Your Earnest Money Ready
Also, you should be prepared to spend your money. Earnest money is the amount you deposit and keep in escrow, until it can be applied to your down payment or closing costs. Once your offer is accepted, you will want to be able to access the amount you have agreed to immediately.
#3 Prioritize the Content of the Offer
You don’t want to be competing with other buyers in a highly competitive market. This is not the time to make contingencies or requests that are unnecessary. Don’t ask the seller for help with closing costs, or wait to sell another property. Or state that you must keep appliances and fancy lighting fixtures. While it is possible for your offer to be accepted, those extras may cause another offer to rise.
#4: Consider the Price of a House
It’s not a good idea to make an offer lower than you are willing to pay in a seller’s marketplace. This will encourage the seller to negotiate. Sellers will prioritize offers over asking prices. If they aren’t particularly attractive money-wise, sellers will likely move on to the next offer, which won’t involve price haggling.
An escalation clause can be added to your offer to help you get it accepted. This means that you are willing to outbid other buyers for a specific dollar amount. This will save both you and the seller time, as well as letting the seller know you are serious about the property. However, sellers may counteroffer their offer and not simply accept the terms of your escalation bid.
This post was written by Josh Dotoli! Josh is the owner of Josh Dotoli Group which is a laser-focused real estate team at Compass comprised of industry experts selling Fort Lauderdale’s best neighborhoods. This dynamic group is one of the top-selling real estate teams in South Florida with over $94 million in sales in the past 12 months alone.