Friends and Clients --
In our current crazy real estate market, inventory is low, competition is fierce, and other buyers can be ruthless. Bidding wars are becoming more and more common, and buyers can easily get caught in a multiple-offer situation.
First, when dealing with bidding wars, it’s best if you can set your emotions aside. It’s easy to see a home, fall too in love with it, then be greatly disappointed if you aren’t the winning bid.
To succeed in this market, you need to get your finances in order, research neighborhoods you’re interested in, and choose a real estate agent long before you’re ready to search for a home. A willingness to compromise is also crucial.
Another major aspect of buying a home successfully right now is getting pre-approved for a mortgage. It not only shows you’re a qualified buyer but also will allow you to act swiftly in this hyper-competitive market. Also note that many seller’s agents prefer to work with lenders who are familiar with the local market, not large national companies.
In a pre-approval, lenders will meticulously review your income, assets, and credit scores to ascertain exactly how much you can borrow. You’ll need to provide two months of bank statements, two pay stubs, and two years of tax returns.
You also may want to consider waiving contingencies; the majority of sellers see them as roadblocks to a sale. For example, the mortgage contingency allows you to pull out of the deal if you can’t secure financing for the property. However, you should only waive this contingency if you’re extremely confident that your mortgage will go through.
The strongest offers are the ones that have waived all contingencies, but you might not be able to waive them all depending on your circumstances, and that’s okay. Buyers have also been limiting the seller’s responsibility for inspection-related repairs and mechanical issues, which can make your offer stronger whether you have contingencies or not.
Remember that in today’s market you need to move quickly and be flexible. Homes are moving swiftly, so if you see something you like that’s within your budget, don’t hesitate to submit a competitive offer. Try to create a path for the seller with as few speed bumps as possible.
Showing a seller you’re ready and motivated to buy is very appealing to them. However, not all sellers are in a huge rush. Plenty of sellers these days want a rent-back period to stay in the home a bit longer while they search for their next house.
Keep in mind that sometimes deals fall through, so if you have a strong enough offer, you could be next on the seller’s list if something happens.
Additionally, paying in all cash will almost certainly put your offer at the front of the line. Or, if that’s not possible for you, think about adding an escalation clause to your offer.
Another strategy is to write a “love letter” to the seller to tell them how much you love their property and how it will be perfect for your family. However, speak to your agent before writing one because, in some situations, they can raise fairing housing law concerns.
If you’re considering buying a home this year, check out all available houses for sale in Austin:
Click here to search for properties for sale in your desired area.
If you’re thinking about buying or have any questions about the process or the market in general, please contact me via phone at 512-829-8000 or reply to this email. I would love to be a resource for you.
Always with sincerity,
Chris Watters
Looking to buy a home? Looking to sell a home?
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