By Anthony O. Kellum
Purchasing a home is a huge deal for most people. Not much is more satisfying than signing your name on the dotted line and then having the keys to our new home placed in your hands. But when it is a seller’s, market signing on the dotted line may feel like it’s a whirlwind away. No matter where you are in the country, it’s a hot seller’s market. The question now becomes how to land your dream home with the best offer.
A seller’s market means there are more buyers than there are homes for sale.
You’ve prepared yourself and are ready to buy your home, but you may have noticed that there are not as many “For Sale” signs in the neighborhoods you would like to live in. The reason is countrywide the number of homes on the market compared to previous years is low. The sellers-market trend is making it more difficult for people who are ready to buy.
You’re probably wondering, “What can I do?” Well, there are a few things you can do when inventory levels are low and it is considered a seller’s market, which is exactly where we find ourselves today. Well priced homes in desirable locations are attracting multiple offers in fact, these homes are selling at asking price and above.
To successfully compete in this type of housing market you can do the following, make the best most compelling offer possible. If you can offer the right price, have a flexible move-in date, and offer other perks you will increase your chances of beating out the offers of others.
Below are more tips to help you succeed in a seller’s market.
- Make your offer as clean as possible. A clean offer means it is not contingent on the sale of another property or have other financial constraints. It should also be free of seller concessions (things a buyer asks for outside of the offer price for example: closing costs.)
- Avoid asking for personal items. Loving their sparkly chandelier that is listed on the exclusions list? Don’t ask for it. You really like their awesome patio furniture? Forget it? Your offer may be very similar in price to another offer that is not asking for the personal items of the seller. Asking for excluded items could weaken your offer.
- Offer an escalation clause. This is a provision added to the contract stating that the buyer will escalate their offer above the highest sales price submitted. The buyer’s contract price is automatically escalated without the need to resubmit a new contract or amend an existing one. This clause usually has a maximum escalation amount.
- Offer a Leaseback. A leaseback allows the seller to lease the property form the buyer after the closing. This can be a risky since some deals fall through before closing, to move out of a primary residence before the transaction has been funded and completed. This allows the seller to sell their home and then move out afterward, eliminating the risk.
- Offer more earnest money. Earnest money is offered with a sales contract to help the seller justify taking their house off the market. It’s a way of proving that the buyer “earnestly” wants to purchase the property beyond the contract alone.
- Offer to pay the seller’s moving expenses. If you are making an offer in a competitive home that is occupied, consider offering monetary value to help pay for the seller’s moving expenses. This is a unique strategy that is not very common, which makes it more effective.
- Waive the inspection contingency. The inspection is stressful for sellers because they have no control over the home inspector’s competency. Ten different inspectors could have ten different results. Some offers will waive the inspection process to increase their contracts chances of being accepted. This is also risky and requires a lot of research to fully understand.
The bottom line is the more you know about what the seller wants, the more likely you are to develop an offer the seller. It can be discouraging getting multiple offers rejected in a seller’s market. But by making a few adjustments to your offer you can get your offer accepted.
“You cannot afford to live in potential for the rest of your life, at some point, you have to unleash the potential and make your move.”
Eric Thomas