How to Make Offers in a Fast Market... What to do?
It's true, the current Real Estate market is experiencing a shift. With low amounts of inventory it's getting harder and harder for buyer's to be the wining bid!
If you're still just starting your search, the most important thing is to have a great Realtor that not only knows the current Real Estate market, but also has experience to help you compete in a fast moving real estate market.
1. Make Sure You're PREAPPROVED! If you haven't secured your financing yet, that should be your first step! Contact Me, if you would like a Minnesota Lender Referral. If you're in another location, ask for a referral from your Realtor, friends or family members to see if they have a recommendation for you. Why? The market is moving so fast, that many homes are selling in a week or less.... the time it takes for you to verify all your funds and speak with a lender, could mean a perfect home slipping through your fingers. So bottom line... DO it NOW, don't wait!!
2. Know your limits... You already have a preapproval so your lender has identified a "safe" and comfortable payment for you, according to your ideal budget. Don't go over it!! Search for homes in a comfortable price range based on your lender and your Realtor recommendation. The reason is, homes that are priced right in the current market will often go into multiple offers... if several offers come in there's a HUGE probability that the competing offers are going to go over the list price!! If you're searching above your means (budget) you will be way over your head when it comes time to make a responsible offer. So stay close or a tad under your max in case it becomes a multiple offer situation. Don't go straight to your max budget or you may not win the bid right from the start.
3. Make your showings count! The market is moving so quickly, take the time to really seek out any possible damage, deferred maintenance, or issues with the home during your first showing. Again, priced right it will likely go into multiple offers and not leave you with an opportunity to do the 2nd showing. You don't want to get all the way through winning the high bid, complete your inspection only to find out that the home is less than par, only to cancel and be out the cost of the inspection. Take your time. Ask questions of your Realtor and make your time in the home about the house itself and not the personal items or decor of the current homeowner! :)
4. Stay Positive! As a professional Realtor, I know it's hard to keep the emotions in check, a home purchase is usually the most important and expensive purchase you will make. When the market moves fast, there's a high probability that you will need to submit a purchase agreement on more than one property before you receive a signed purchase agreement. Don't fret, in this business, everything works out for a reason. The right home is just around the corner. What will be, will be... I've seen people fall in love with a home they didn't get... only to be extremely grateful when their offer was accepted on the true home for them! Be patient, trust your Realtor and stay positive!!
5. Play to win! This goes hand in hand with #2, a fast moving Real Estate market means that you will need to be decisive of the market, understand what wins bids. Consult with your Realtor, get advice, and do everything you can to make your offer as appealing as possible (without over extending your budget). Consider speaking with your Real estate agent and lender about THE BEST Terms to compete. Not every location is the same so do consult with an agent and loan office experienced in your local market, but financing is a big deal in Minnesota Real Estate... FHA loans or government loans are really wonderful for the first time home buyer's or buyer's with limited funds, excited about homeownership. The loan type is appealing as only 3.5% is required as a downpayment. When competing, against a conventional loan, the downpayment is typically 3-20% down which is quite a bit of a difference in how much money the buyer has to show the seller, they're qualified and have money to ensure everyone gets to the closing table.
Not to mention, the appraisal process is much stricter for an FHA loan. If the house needs work, is older in age or the seller's are limited on the funds to cooperate with inspection repairs, they may pick a conventional offer over FHA even if the dollar amount is not the highest. Do what you can to make your terms the most appealing... remember, the price isn't the only winner here. Try to make each piece of your offer the most appealing to a seller, you will up the anti that much more!
For more information on available homes for sale, or real estate tips, tricks and advice, check out my Heidi Herda Real Estate blog, or contact me at The Herda Home Team ~ 612-807-4858 ~ Keller Williams Classic Realty. Thanks for checking out my blog, How to Make Offers in a Fast Market... What to do? Don't forget to "like" my Champlin Real Estate Facebook page for more great info! #herdahometeam #realestateadvice #champlin #realestate Herdaheidi@gmail.com ~ Licensed Minnesota Residential Real Estate Agent