Anna Banana Kruchten CRB, CRS 602-380-4886 hits the nail on the head with this post!
Another tactic to consider is an escalation clause on your offer price. This way, if another offer comes in over your original offer, you can automatically move up, vs. being out completely. A word of caution if you are going to use this....you better have the cash to back it up, as it will most likely send you into the world of "the property did not appraise for contract price."
Great stuff to keep in mind
Writing a Successful Offer in a Hot Market Real Estate Cycle
Buying a home can be stressful And buying a home during a hot market cycle can really tie your stomach in knots - but ONLY if you're not prepared properly. It's an agents job to educate their clients on the process of buying a home. Writing a Successful Offer in a Hot Market Real Estate Cycle is an art that is learned. It is major negotiation skill. Be sure to ask your agent about what's happening in the market. Knowing the current market statistics and trends is of utmost importance in being able to successfully navigate a bidding 'war'.
This past weekend we put 2 hot properties on the market. They were properly prepared for sale, staged, professionally photographed and priced correctly. All systems were set to say SOLD quickly. We were swamped with showings all day Saturday and Sunday for both homes. Offers began to come in within hours. So that was great and not so great....why?
Quite a few of the buyers did not have their financing properly in place. Most of the buyers agents had submitted a 'prequalification' addendum (but some did not). Imagine a seller reviewing offers and some have ZERO DOCUMENTATION that the buyers are qualified. Why bother writing an offer if you can't prove to the sellers you can actually close on the home? Now who does that make sense too?
In Arizona we have a specific form that is required per contract to be attached to an offer. This form clearly spells out where the buyer is at in the mortgage application process. We can see if the buyer has submitted their qualifying documentation to the lender? And we can also see if it was just a verbal discussion - which isn't given a lot of weight in a hot market (or any market for that matter). Remember - you will be competing with other buyers that are 100% pre-qualified. I can't stress enough that it is absolutely the home buyers job to prove to the sellers, beyond a shadow of doubt, that they are Ready, Willing and ABLE to buy a home and close on it.
Now I know everybody wants a 'good deal'. But when you're in a hot real estate market and thinking about trying to get a 'good deal' when a home is only on the market a few days or so THINK AGAIN! If the home is priced right it will sell for very close to list price, at list price, over list price or way over list price. And this is when the Buyers Agent must have a thorough knowledge of current market statistics and trends so they can advise you on how to write a succesful offer. There isn't a lot of negotiating folks, in a hot market. You might be disappointed if you write a low offer and lose out on a home that is perfect for you. But once you figure this out by trial and error, you'll figure it out and make a decision. Do I want a home or not? If so submit a good offer. If not, well that's ok too if it's right for your situation.
One more tip for writing a successful bid: Don't ask for items that weren't listed in the MLS Plano, such as refrigerator, washer, dryer, Ramada, grill or whatever other items you think you can negotiate. Just don't do it! The buyers that have the best chance of winning a bid write what I call - a CLEAN OFFER. Buying a home is not like shopping in a store and picking out what you want to buy. It's just not! You are trying to buy REAL ESTATE - not stuff. Ok!!!!! Now move forward and buy the home of your dreams! Call us if we can help you buy a home in the Phoenix Metro Market. We know the market and know how to negotiate successfully.
Writing a Successful Offer in a Hot Market
Anna "Banana" Kruchten
Designated Broker & Owner
CRB, CRS, GRI, CNE, SFR, CDPE, WLS
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