Have you found yourself facing fierce competition while attempting to buy a home?
If you have already lost a home or two to competitive offers and bidding wars, gearing up for another offer may seem hopeless. Thankfully, there are many ways you can increase your chances of getting your dream home, despite the competition. Sellers want the best offer, not necessarily the highest one, which gives you more chances to outshine the others while demonstrating the seriousness of your bid. Here are six ways to help you win your dream home:
1. Do Not Be Overwhelmed
In a competitive buying market, try not to take a loss personally. If you find a home attractive, chances are other buyers in the area do as well. Stressing or panicking about a loss can lead to a sense of missing out or desperation, which does not bode well for future buying attempts. Staying stressed can lead to impulsive decisions and poor decisions, leaving you with a sub-par property or higher financial payouts. Avoid settling for a home you aren’t happy with by refocusing before looking at more homes and making another offer.
2. Base Your Buying Strategy on the Local Market
Many people base their knowledge of the real estate market on the national news and various home-buying or house-flipping reality television shows. In actuality, real estate markets are extremely local, and your offer strategy should reflect that. Many market dynamics vary among states, cities, and even neighborhoods, so use your Realtor® as a guide. Ask how multiple offers, closing costs, and contingencies such as home and termite inspections are handled in your area.
3. Ask about Specific Seller Terms
Before submitting an offer, your Realtor® can also help by reaching out to the listing agent and asking if there are certain terms the seller would like. This may include additional earnest money, a rent-back period following the sale, or shorter inspection and financing contingency periods. By meeting a few of the seller’s wants and desires, your offer will immediately stand out against the competition.
4. Reach Out to the Seller on a Personal Level
There is a reason that most job interviews happen in person, because employers can tell a lot about someone simply by meeting them. Chances are that you will not meet the sellers before making an offer, but you can do something to stand out as more than just another buyer. Personalize the purchase by submitting a handwritten note or letter with your offer and financial documentation, telling them about yourself and your family. Share with the seller why you were drawn to the home, what you like about it, and why you want to live there. Be honest and authentic, and your personal appeal may sway the seller in your favor. Including a handwritten note will also give the seller a very strong sense that you are ready and willing to close the deal.
5. Indicate Financial Readiness
Chances are, you know either a seller or a buyer whose deal fell through because of financing issues. You can help relieve a seller’s mind by indicating your financial readiness with your offer. If you are taking out a mortgage or other bank loan, provide the seller with a letter of pre-approval and a financial information statement. Depending on your bank or lender, ask for a letter that further states their confidence in your purchase ability.
If you have the financial means, you may also opt to pay in cash and provide a bank statement that indicates your financial ability to fund the home purchase. Sellers may be willing to accept a lower cash offer with more desirable and quicker closing terms. All of these moves will increase your credibility as a buyer as well as boost your chances of getting the home.
6. Increase Your Earnest Money Deposit
If you are willing to take a financial risk for the reward of your dream home, increasing your earnest money deposit is one of the best ways to stand apart from other bidders. If your offer is accepted, the money will go toward the home’s down payment. In the meantime, increasing your earnest money demonstrates your seriousness and purchase commitment, prompting the seller to give your offer more consideration.
Two Bonus Ideas
Below are two bonus ideas should you find yourself in a truly competitive situation:
- If you have found your dream home and plan on a large down payment, then don’t make the purchase contingent on the appraisal. After all, you believe in the value, right?
- Consider adding a clause in your offer that will beat the next best offer by a margin of money, such as $2,000 or $5,000, up to a specified amount. This is kind of like sniping on eBay.
For more ways to help stand out amidst multiple offers, contact the Eric Stewart Group. In addition, download our free Savvy Buyer Guide, which is packed with useful tips on buying a home and will help you avoid common buyer mistakesl
For more information on this topic and other news regarding the real estate market, listen to The Eric Stewart Show every Sunday from 7am – 8am on WMAL AM 630 or 105.9 FM. If you miss a show, don’t fret! You can access the archived shows here.
