If you are not first, you are last. (Myth)
I’m sure you have heard the saying, “If you are not first, you are last”. This can be applied to so many competitive facets of our lives. Competition in sports (Running), schooling, careers, and yes, Real Estate. If the past year has taught us anything, it is that Real Estate is more competitive than ever.
Standing out as a buyer can be difficult, but with the help of a qualified Realtor®, it can be done. So, how do you have the winning offer, even if you are not the only or the first?
Be Prepared.
- Before you even start looking at house online, you need to get pre-approved with a qualified lender. Understanding what you can afford, will allow you to know where to start your search. Knowing what payment, you are comfortable paying, is also imperative. The two do not always go hand in hand. You may be approved for a loan that requires a larger monthly payment than you wish to pay. Just because you get pre-approved for a certain amount of money, doesn’t mean you have to spend it. Additionally, an offer that includes a pre-approval will be much more attractive to a seller. The pre-approval lets the seller to know that you can secure financing for a loan.
-Know your overall budget. How much money are you willing and able to spend? Getting a pre-approval allows you to know what a lending institution will extend in a loan. From there, you can decide if you want to access all of those funds based your comfort level of the monthly payment. In addition to the monthly mortgage payment, buyers should consider additional costs like HOA fees, insurance, taxes, and even potential repairs. Some items to consider associated with the actual transaction include the down payment, earnest money, inspection fees and closing costs.
-Know your “must have” items. If you need to be at a certain price point, to be in a specific school zone, to be within a specific distance to work, it is imperative that you communicate these items to your agent. If there are items that are absolute deal breakers, those need to be communicated, too. From there, your agent can compile all the above information and start the search. If you have already found a home that meets all your needs online, communicate that to your agent so that they are able to gather as much information on the property as possible. A Realtor® has access to information, not available to buyers, through their Multiple Listing Service (MLS). Your agent can also communicate directly with the seller’s agent, gaining insight on the property and seller’s position.
Put your best foot forward.
-In today’s competitive market, a seller is expecting top dollar and a quick sale. If a newly listed property checks all your boxes, don’t hesitate to make a competitive offer. Hesitation and a low offer are likely to lose out. The whole reason you put in the work to figuring out what you need and what you can afford, is to allow for quick action when the right property becomes available.
-Start with a strong offer price, that can be backed up by comparison, with recently sold homes in the area. Additionally, buyers can include a larger earnest money sum or waive an appraisal. (These two come with additional financial risk to the buyer. Be sure to understand the financial impact of both before including them in a contract.)
Do not ask for extras. This includes allowances for repairs, closing cost assistance, and any of the sellers personal items. Any of these could make your offer less competitive than the one that was potentially placed right before or after yours. (If you are salivating over the outdoor furniture, you can still ask the seller. Wait until the contract has been accepted and then ask if it can be negotiated outside of the deal.)
As always, choosing a qualified Realtor® will allow you to navigate this wild and ever evolving Real Estate market with ease.
-Nicki Carroll