Strategies in a Hot Real Estate Market
Today is a very good day! Yesterday we FINALLY got some happy buyers under contract on the purchase of a new home.
They had been frustrated for months, with homes in their price range being snapped up the minute they hit the market, and they were beginning to get desperate. Homes to rent here are as difficult to find as a good home to buy in their price range.
Their realistic fear of being
homeless in May was beginning to take hold.
The market statistics on the day we wrote the offer prove what we all know, it is an unbelievable seller's market, with 1.4 months of home inventory in the town and price range of their soon-to-be new home. Six months is considered a balanced buyer/seller market.
Right now I have a long list of frustrated pre-approved buyers ready to pull the trigger TODAY if they could just find a house that meets their needs...
What strategies did we use to achieve
success with the odds stacked so heavily against us?
My partner husband saw the house pop up on the hot sheet and called our buyers, who are out of town. He was the first agent through the door, doing a Skype walk through with them 3,000 miles away. While he was at the house, I was procuring their pre-approval letter freshly dated and matching their full price offer amount, and calling the listing agent to say we would be sending an offer over and asking if there was anything we should know while writing the offer. We didn't need to tell our buyers that they needed to move at the speed of light because the house would be gone by the end of the day. They had learned that reality first hand over the past few disheartening months. The listing agent received our signed offer before the next person had finished their showing!
2. ESCALATION CLAUSE!
Frankly, I'm surprised I don't see more agents use this magic bullet. I have had success with it many times. Here is the exact verbiage copied from our full price offer this week. I simply typed it into the Other Terms and Conditions section.
"Purchase price to be $235,000, provided however, in the event of a bona fide competing offer, Buyer will pay $1,000 over the highest offer's net up to a purchase price of $250,000. In the event of an escalation Seller shall provide Buyer with a copy of the competing purchase contract giving rise to the escalation. In the event Seller fails or refuses to provide Buyer with such copies within 24 hours of Seller's acceptance, Seller's acceptance shall remain binding upon Seller without escalation. By providing copies of a competing offer giving rise to an escalation, Seller represents and warrants to Buyer that the competing purchaser and such purchaser's offer are bona fide and in good faith."
3. SEND OVER A STRONG OFFER AND COMPLETE PACKAGE!
It is so frustrating as a listing agent to receive an offer without the appropriate supporting documents, or a contract with omissions and errors in it. When a seller is making a decision between multiple offers, it is critical for them to have complete information on which to base their decision. If you aren't going to include a strong pre-approval letter, you are wasting everyone's time. Honestly, you might as well not send the offer at all. Did you include all signed disclosures that the listing agent uploaded into the system? Did you shorten the due diligence deadlines to the minimum? Did you resist asking them to throw in the kitchen sink? (Well, the kitchen sink is always included, but you know what I mean.)
I'm baffled that so many people don't realize there are several ways to strengthen an offer besides the dollar amount of the offer. Back in the days of short sale mayhem I wrote a post that has had thousands of views and was even picked and distributed up by Inman News. Although we are no longer in a short sale market, the strategies for strengthening an offer are timeless.