I know I have touched on this in past blogs, from both the Buyer’s point of view and the Seller’s. But there are a few more “tools” in your tool belt that are now a must when writing a winning offer in this crazy Seller’s market. First off, you need to be ready to make an offer! Long gone are the days when you could take weeks to decide on purchasing a particular home, because in Castle Hills, the surrounding communities AND Nation-wide, homes are selling in literally hours…
Here are some tips and contract terms to consider when competing with multiple offers:
- Get Pre-approved by your lender and have a current pre-approval letter in writing to attach to your offer. Also keep in mind that if you are pre-approved for a maximum purchase price, you should only look at homes that are initially listed for less than that amount, so you can have a “cushion” when writing your offer. List prices are now considered simply “a place to start”. This goes for cash offers as well as financed offers. In Castle Hills, sellers have been selling homes on average 7.7% over list-price this year and even up to 21% over list.
- If financing your home purchase, on the Third Party Financing
Addendum, check the SECOND box under 2.A. Buyer Approval if possible; this
allows you to obtain financing, but is more desirable to a Seller as it removes
any “finance contingency”. If you MUST
put a number in the blank by checking the first box, keep those days to as few
as possible. (Your Lender can help you
determine how many days it may take for your final buyer approval).
- Full Appraisal waivers. Consider including one if your offer price is well over list. Keep in mind however, that you must be prepared to cover the “gap” between the appraised value and your offer price out of pocket… over and above your down payment and closing costs!
- Offer your BEST price the first time around; as counter offers on sale price rarely happen anymore, because there are typically multiple offers to choose from.
- Offer more than the average % of Earnest money down.
- Offer a short Option period of no more than 5 days for a higher Option fee.
- Offer to pay for the Owner’s Title policy.
- If a Survey is needed, offer to pay for it.
- Don’t request a Home Warranty amount if you can help it.
- Don’t include a Sale of home contingency. Nowadays this just won’t fly. You need to be prepared to purchase without selling your existing home first. Plus, it’s a good idea to secure your future housing before listing an existing home anyway!
- Be flexible with your closing date and offer a lease back if the Seller needs one.
- Lastly, be sure that your Real Estate professional fills out the entire contract completely and correctly with no blanks!
Well, I hope this gives you an idea of what you need to do when making an offer on a home in our current market. In the past, things tended to slow down during different times of the year, but now in 2022 with our low housing inventory, it’s fast paced all the time, every day! So be prepared to put your best foot forward… good luck!