Buying a home in a Seller’s Market can be frustrating. It seems like every house that you see sells within a day or two and has multiple offers. So, how do you increase your chances of success? Part of it is luck, just being in the right place at the right time. But there are things you can do to make yourself look like the perfect buyer in a sellers eyes.
Have A Current Pre-Approval
If you don’t have a pre approval from a reputable lender, you have already lost. If you have one, but it is several month old, ask for a more current letter. If your lender is able to, ask for an underwritten pre-approval. This is more than the standard letter that most lenders issue. An underwritten pre-approval actually starts the loan process prior to having a home under contract. This ensures that the buyer won’t have any hiccups along the way, and can often lead to a much quicker closing.
Understand The Current Market
Right now we are in a market where homes sell quickly and many buyers miss out or are outbid in a multiple offer situation. You must understand that you don’t have time to sleep on a home. If you view a home and you love it, move forward. It’s tough to make such a huge decision and commitment so fast, but that is the realty of the situation we are in.
Write A Strong Offer
You need to see a home as soon as you can and then put forward a STRONG OFFER. This doesn’t necessarily mean you pay over list price. It means make your offer very attractive to the sellers. There are several things you can do to achieve this. A current, underwritten pre-approval will show the sellers you are able to make the deal. Increasing your earnest money deposit can show that you are seriously interested and not likely to back out of the deal. I never recommend it, but removing the inspection contingency will present a cleaner offer that has little chance of not going through. If you do have an inspection, don’t ask for minor ticky tack items to be repaired.
Your agent should do some homework before submitting any offers to put you in a good position. Do the sellers need to a find a home first before moving? Write in an extra 30-45 days for closing if you are able to. Offer them a rent back agreement where they can stay in the house for an extended period of time and pay you rent(there are a few things to think about with this option, insurance, liability, etc. so consult your agent first). Are they in need of a quick close? Then make it a 30 day or less closing period. If you’ve got an underwritten preapproval, this can be a great option if the seller wants it done fast.
Make It Personal
It’s not always an effective tactic, but it can work in the right situations. Writing a personal letter to the sellers can swing things in your favor. If it’s a family that has been in the home for a long time, they will no doubt have an emotional attachment to the home. So, if they can see a bit of themselves in the next buyers, someone who will love and respect the home and grow a family in it just like they did, it may give you a bit of a edge over the competition. Talk about your family, or the family you want to start in the home. Mention specifics about the home that you love. Try to find things you may have in common when you are looking through the home. If you want to take it a step further, make a video introducing yourselves and talk about what you see in and love about the house. It won’t work on more data and financially driven sellers, but it’s worth a shot.