With the Waldorf, MD real estate market starting to look not as bleak, those super amazing deals on houses are starting to dwindle. Believe it or not, you may be put in a situation where you aren’t the only one putting a offer in on a home. If you are facing a bidding war to ‘win’ your new home, here are a couple things to keep in mind (courtesy of SmartMoney of the Wall Street Journal):
Put a Cap on Your Price
Multiple-offer situations create an auction-type atmosphere, and that can cause people to overspend. Ever bought things on eBay? OK, now how many times did you spend more than you planned because you really wanted to win that item? That is the dangerous competitiveness you want to avoid. Set a maximum price on how much you're willing to spend on the home with your Realtor, and don't exceed it.
Less Contingencies = Happy Seller
Most states’ real estate purchase contracts include contingencies for inspections, appraisals, and financing. Usually, the fewer contingencies in your offer, the better it looks to the seller. Especially with the investors in the Southern Maryland real estate market making cash offers on foreclosure deals, you need to make your offer as contingency undemanding as possible. For instance, offering to shorten the inspection contingency to seven days, or not making the offer contingent on the sale of your home (and your vacation home and your random plot of land) might help to show the seller you’re ready and serious about moving forward quickly with the deal.
Have Your Lender Call with a Financial Reference
Your Realtor can ask your lender to contact the seller’s agent when your offer is presented to assure them she/he has reviewed the buyer’s financial information and that they’re qualified to make the purchase based on the offer. The last thing any person involved in the transaction wants is for the lending to fall apart days before settlement. It leaves a bad taste in the seller’s pocket, and you may have a more difficult time getting any other offers accepted.
Upping the ante? Double Check your Figures
If you’ve decided that you must have this house and plan to bid over the price cap you set earlier, check back with your lender to have them run the payments at that. Make sure you know what your new monthly payments, down payment and closing costs will be with the new offer. You may think bidding an extra $15,000 isn’t much, but it’ll add up over time, and may put you past your financial comfort zone.
Schmooze the Seller
Who said that schmoozing never did anything beneficial? There will be times when you’ll notice certain aspects of a home that the owners have taken particular interest in – for instance, an award winning garden or meticulously designed floor plan. Sometimes playing up the fact that you have similar interests or expressing that you ‘wouldn’t change a thing’ about the home really hits, well, home with sellers. This definitely applies more to a 20 year family home than an investor-owned property. Sometimes, sellers just want to trust the new owner to take care of their home and not make lots of drastic changes. Remember that people don’t like the idea of their memories being ripped up or boarded over.
Dearest Home, How I Love Thee
Sometimes sending a personal note along with your offer could sway the seller. A sincere letter about yourself with an explanation of why you love the house could go a long way in convincing the owner that you’re a good fit. This not only is an extension of schmoozing the seller, but it can also be used to ensure your financial soundness and ability to purchase the property at the price offered, and how quickly you would like the transaction to take place. If you’re ready to look for a new home, or just have questions before you make the decision to move forward, I’m more than happy to help you with either!
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