With summer in our sights and the housing market starting to heat up I wanted to discuss some options for buyers to help give their offers some much needed boosts in today’s competitive real estate world.
Almost everyone knows the market has been slanted heavily towards sellers for quite some time, but the floor is starting to tip closer to level more recently, giving potential homebuyers a little more leverage to work with as they navigate finding the homes of their dreams.
As the market comes closer to leveling out, placing offers on homes can become a little trickier, even if the chances of getting a home are better for buyers.
Not all offers are equal, and though the price tag remains king, there are a lot of other factors and contingencies that play major roles in helping home sellers decide on which offer to select.
And though the market looks a little friendlier for buyers, inventory in states like Maine and New Hampshire remain low compared to the demand, meaning every detail in an offer can make a big difference!
So let’s discuss some of the key elements of an offer and what can make yours stand out from the crowd.
First and foremost, as mentioned earlier, price still reigns as the key component to your offer. Bargaining is fun, for sure, but coming in with a strong and realistic offer gives you the best chance of having your offer selected.
Starting off too low in hopes of negotiating to a friendlier number doesn’t often work out in real estate, especially in a seller’s market.
The real figure to focus on is keeping yourself competitive without compromising your budget. Bidding wars are often tough and frustrating, but focusing on your price range and staying in your financial comfort zone is essential to the buying process, regardless of how much you want to win out on a home.
Bidding wars are frustrating but inevitable in today’s real estate world. But there are important ways to protect yourself while staying competitive. Consider using an escalation clause, which allows you to increase your offer to outbid other buyers.
Escalation clauses are a smart way to approach a home with many potential bidders. They work like this: you can put in a competitive offer and escalate that number by increments to beat out any higher offers the seller might receive up to whatever ceiling you set.
For example, you can put in an offer at the listing price of $450,000 with an escalation clause of 10 grand over the highest offer up to $500,000. If another bidder offered $475,000, your offer would climb to $485,000, beating out the competitor.
Escalation clauses can protect buyers, but they need to be used wisely and prudently. Keeping within your budget and financial comfort zone are key.
Cleaning up your offer is another great way to stay competitive and make your offer stand out to home sellers. Limiting contingencies, concessions and being flexible with closing dates can boost your offer’s appeal.
But it’s important to protect yourself too, which is why I feel it’s important to discuss home inspections here.
I’m a big proponent of home inspections and feel strongly that all my clients should have one for any home they’re buying, but many potential buyers feel adding an inspection period might spook sellers into choosing another offer.
Certainly waiving an inspection period is appealing to sellers. But buyers have different options for having a home inspection and not scaring sellers away. Consider having one for informational purposes only, or putting in language that might protect a seller from costs up to certain amounts.
This type of language can help keep your offer clean while giving you the opportunity to know any potential problems or concerns with the home you’re buying.
One more way to boost your offer’s appeal is to remain flexible. I mentioned this in passing with keeping a clean offer, but it’s worth expounding on here too.
Keeping a closing date that works best for the seller is very appealing. Perhaps they need a quicker closing. Being able to move on the property fast might strengthen your offer.
Or perhaps the opposite is true and the sellers need more time. Pushing a closing out with your offer could give you the competitive edge you need. Having your agent gather as much information about what’s important to the seller is essential for lining up the best offer.
The spring market is here and the competition among home buyers is warming up with the temperatures. Bringing forward a competitive offer with a strong price and clean and flexible contingencies are the best ways to ensure your offer will get the strongest consideration from home sellers.
If you have any questions, comments or concerns about the home buying process, different options with putting offers on homes, or any general questions about real estate, shoot me a hello today!
