Right now pre-owned home inventory for active listings is at historically low levels causing housing frenzy spikes. Inventory challenges equal competition for homes that are desirable and priced appropriately. To help buyers put their best foot forward on the next home offer here are a few strategies for winning a bidding war in today's market.
Offer a seller post-occupancy / rent back agreement
Buyers I represented recently won a multi-offer situation by offering a 30 day post-occupancy with a 30 day option to extend to sellers who were having a new home built. Most lenders will allow a buyer to offer a 30 to 60 day rent back agreement to the current owner of the property. This type of arrangement gives the sellers more time to find a property, have a house built , pack, or finish out the school year. The buyers who have the luxury of being flexible, a post-occupancy can easily make an offer very appealing to the sellers.
Get pre-approved
The first step in the home buying process is to get pre-approved from a well regarded local lender. This is critical as the final decision in a multi-offer situation could come down to who the listing agent knows and can trust to get the loan across the finish line. Also look for a lender who can recommend the right loan program. I recently had a buyer client who qualified for a $10,000 closing cost grant program which allowed them to make a stronger offer to secure the deal. Having an experienced loan officer who can recommend the right loan program might make the difference in making a winning bid.
Pay cash or make a large down payment
In 2022 Frederick, Md. was the number one place in the country for cash deals. Paying cash is still king, but be prepared to show the proof of funds from your financial advisor. I submitted quite a few cash offers for buyer clients last year. If cash is not an option a 20% down payment with a strong lender pre-approval may help win a bidding war also.
Offer compelling terms
Over my career as a REALTOR® I can honestly say rarely is the decision made to accept an offer solely on price alone. Sellers typically make their decision after weighing several factors with the terms of the sale being extremely important. In Maryland the State and local transfer taxes per the contract are split 50/50 between buyer & seller. A buyer could offer to pay the 100% of the transfer taxes to add to the seller's bottom line. While I would never recommend any buyer to waive a home inspection a pre-offer inspection maybe able to be preformed with the permission of the sellers. Waiving an appraisal or adding an appraisal gap clause may also significantly strengthen a buyer's offer in the eyes of a seller.
Find the right REALTOR®
It is critical to find an agent who has a great reputation in the real estate community and one who networks with other REALTORS® in the local market place. Prior to submitting an offer a good buyers agent will call the listing agent to ask what is most important to the seller. There are many times I have represented buyers where my relationship with the listing agent made the difference. If the Seller's agent has confidence you will get the deal across the finish line that is worth it's weight in gold.
If are looking for an expert REALTOR® in your neck of the woods I would be happy to make a recommendation. Through my affiliation with the activerain community and The Leading Real Estate Companies of the World, I network with some of the top REALTORS® from around the globe and can find you a top agent in your neighborhood.
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