It is a crazy market in most places around the country. Even in places where people are moving out of the city such as Portland or downtown Seattle, real estate prices and the competition is fierce. In some places like Arizona, buyers even have to put in for a lottery in order to get the chance at making an offer on a home.
There are plenty of buyers but very little inventory and very few sellers. Properties that do get listed are usually under contract within a day or even minutes. Unless there's something seriously wrong with the property, it's overpriced, or it's very unusual, most homes are flying off the market within a week. So how can anyone buy right now? And, for those that want to buy but need to sell first, they may be scared to sell because then they'll have to turn around and buy in the same market.
In many places, new contingencies are being put in place where if the seller decides to sell the property, there's a contingency that they need to find a new house before the buyer can actually purchase their home. So what is a buyer to do? This article will future tenant negotiating tips from real estate experts around the country and their suggestions to buyers on getting the home they want.
Make sure you use an agent that is well-versed in the homes in the neighborhood in which you want to buy.
"You need to use an agent that understands the nuances of the real estate market in the neighborhood where you want to buy. If they live outside of the city or county, they probably are out of touch with what's really going on in the neighborhood. If you have your sights set on a particular neighborhood or community, find an agent that not only works in that neighborhood but may actually live there as well. They truly know what's going on in that neighborhood and how to negotiate with sellers. They may even know of some homeowners personally that plan on selling so you can get in the door before any other buyers do." - Don Payne, Columbus Realtor®
Make a clean offer.
"Sellers don't want to deal with a bunch of conditions and contingencies in a sellers market. Remember, they're probably going to get at least 10 offers within the first week, so you'll need to make that offer as clean and clear as possible. The offer should be free of any seller concessions or items that you might be asking for outside the realm of a clean and clear offer. Considering waiving at contingencies may also be an option but this is something to consider carefully with your real estate agent. If you feel confident about taking the risk and waiving inspection, appraisal, or financing contingencies, it may be the best option to get you the home." - Gregg Camp, Santa Cruz Homes for Sale
Have the buyer's agent talk with the listing agent about seller motivation.
"Communication is huge! If you have a great agent that can get in the back door with a listing agent discussing motivations for the seller and how to write up an offer that would be attractive to the seller, you may have a better chance at getting the home you really want. If you appeal to the seller on their terms with their motivation in mind, they realize you're wanting to work with them and may offer you the home rather than another option." Ryan Coleman, Knoxville TN Homes for Sale
Don't wait for the weekend.
"Too many buyers get complacent with showings. If you want the house, you better be ready to jump on it that day and maybe even that hour. If you don't have any way of knowing about new listings before they actually hit the market, you can't wait once they do. You don't want to be the buyer that waits until the weekend to view a home in a sellers market. By the weekend, that home may be sold even if the seller markets it and posts on a Friday. Try to see the house as quickly as possible. Most sellers want to see the home sold as quickly as possible so if you are one of the first people through the home you can be the first offer on the table." - Katie Noble, Park City Utah Realtor®
Have your financing ready to go.
"If you don't have your financing ready to go, you will not even get a second look from sellers. You will need to have your preapproval letter ready to go stating that you can afford the home you're making an offer on and you have a substantial down payment/earnest money deposit. Sellers want a serious buyer and if you haven't done the financial homework ahead of time, chances are another buyer who already has done their homework will beat you out." Sara Mehrpouryan, Sherman Oaks Real Estate
Make an offer in cash if you can.
"Not everyone can make a cash offer but if you can make a higher cash offer than your competition, you might get a second look. All cash offers can be very appealing and can lead to a higher likelihood of you winning the house. If you don't have to use a lender you won't have to deal with financing contingencies, which conveys to the seller that you probably are serious about buying the home and won't pull out at the last minute." Luis Pezzini, Luxury Leasing in Los Angeles
Consider an escalation clause.
"Escalation clauses used to be a saying in 2006 and 2007 but now they are definitely coming back. An escalation clause basically states that you're willing to pay over another higher priced offer up to a certain amount in particular increments. For instance, if you're buying houses $400,000 you can submit an escalation clause saying that you will pay $5000 over the highest priced offer up to $450,000. This means that if someone comes in with a $410,000 offer you are willing to go up to $415,000. However, the seller needs to prove that they have a higher-priced offer and while you may not always get the deal, this is a good way to appeal to sellers. The only drawback is that the home must appraise for the higher value if your financing it otherwise you'll have to make up the difference." Alex King, Fort Myers Realtor®
Make a higher earnest money deposit.
"The earnest money deposit may be a good way to earn sellers trust. If you had to offers in front of you and one had a $500 earnest money deposit and another had a $10,000 earnest money deposit, the appeal may be to go with the higher earnest money deposit because sellers realize if the buyer backs out for no apparent reason, they may be able to keep that $10,000 and that's quite appealing to sellers. While most buyers the agents can get their buyers out of an offer if necessary, having a higher earnest money deposit may seem more appealing." Miggins Real Estate - Homes for Sale in Summit NJ
It's not always about the price.
"It's not always about the price when making an offer. A price might be great but if the terms suck, the seller may throw out the offer altogether. Ask the listing agent what terms the seller really wants and build your offer around that." Buyer Brokers of Florida
Consider making compromises.
"You have a better chance at getting your offer accepted if you are willing to make compromises to benefit the seller. While you may not want to give everything away, compromising on the timelines, seller contingencies and terms may get you the house. Try and keep emotions out of it and listen to what the seller really wants. If you don't, there's a buyer behind you ready to make those moves." Billy Rabbitt, Southern Maryland Realtors®