Spring is in the air – the weather may be just starting to warm up, but the real estate market is already hot! Spring has proven year after year to be the season in which the real estate market takes off. Buyers are out in droves, trading cabin fever for open houses, and their house hunt usually starts with a goal of closing on a home and having time to get settled in before fall. Spring tends to bring more listings to the market, but on the flip side, it also brings more competition between buyers. In the spring market, it is not uncommon to encounter a multiple offer situation.
How can buyers make their offer stand out in a sea of other offers?
Get Pre-Approved
To show a seller that you’re serious about your offer to purchase their home, you’ll need to prove that you are prequalified for a home loan. However, a prequalification letter has become standard with most offers to purchase, so that alone probably won’t help you stand out from the crowd. Take things a step further by getting pre-approved by your lender. Pre-approval requires that you submit paperwork to your lender up front and allows the bank to verify the amount you can afford to pay for your next home. This will show sellers that you can back up your offer with real money. Ideally, you would submit a loan commitment with your offer to prove to the sellers that you have the loan work finished compared to the other buyers.
Know Your Limits
Patience can be hard to come by when you’re competing with other buyers in a seller’s market. However, try not to get so carried away that you forget the bigger financial picture. While it may be tempting to offer over your budget in order to secure a home you love, be sure to run the numbers and ensure that bidding high won’t put a strain on your finances. This is especially important if you’re not sure the home will appraise at the price you’re offering – will you be able to spare the extra money that your lender won’t cover? Knowing your limits means that when the right house comes along, you’ll be able to put in a strong, competitive offer without fear of becoming house poor.
Keep Your Options Open
Keeping your options open can give you a leg up on other buyers who are more set in what they’re looking for. Many buyers in today’s market are looking for a home that is updated and move-in ready, but perhaps you’d be open to a home that needs a little bit of TLC. You don’t necessarily have to take on a full-blown fixer-upper though – look for homes that have strong bones but are in need of cosmetic updates. That home with not-so-neutral paint colors and dated fixtures could be your dream home with some modern upgrades. Homes that have been on the market for a few weeks may be continually overlooked by buyers who want a turnkey property, which means you’re less likely to have to compete in a multiple offer situation or need to offer above list price. If you’re open to spending a little extra money after closing (and possibly applying some elbow grease), you could end up with an excellent deal.
Work with an Expert Agent
Buying a home can be stressful in any market, but a seller’s market can really crank up the pressure. Working with a trusted, experienced real estate agent will help ease some of your nerves. Your agent will help you craft a strong offer that will stand out amongst other buyers and he or she can also keep you grounded and realistic when you may be tempted to stretch yourself thin. Having an expert to guide you through the entire process of your home purchase will ensure that everything runs smoothly – a great agent is a must for peace of mind.
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