The shortage of homes for sale has created fierce competition amongst buyers, often creating bidding wars. In mid-July I listed a home on Friday evening, and by Monday evening I had 22 offers, as high as 10% over the asking price. While the current state of the market is wonderful news for sellers, it can be a frustrating experience for buyers, as their offers get rejected over and over.
If you are like most buyers, you are not in a position to make a cash offer. However, there are some things that you can do to help increase the chances of a seller choosing your offer.
No Concessions. The term “seller concessions” refers to expenses that the seller pays on behalf of a buyer, such as fees charged by the lender for issuing the loan. In a competitive market you will need to raise the offer price to offset the request for concessions, but offering too high will cause concerns that the home will not appraise. When I was reviewing the 22 offers with my client, the first contracts we eliminated were the ones asking the seller to pay the buyer’s closing costs.
Reduced Contingencies. The contract has several included contingencies to protect the buyer’s earnest money. While it is never recommended to waive a home inspection, you could reduce the due diligence period from 10 days to seven days, or even five days if a home inspector is readily available. Offering to waive the appraisal contingency, or to pay a certain amount above the appraised amount if it comes in low, will also make your offer stronger.
Include a Personal Letter. Sellers generally like to pick the highest and strongest offer, but sometimes adding a little emotion to the negotiations can help. Write a personal letter to the sellers explaining why you love the home and decided to write an offer on their house instead of another. When touring the property take notice of anything in the decor that indicates you have something in common with the seller and mention that as well. Sellers love to hear that the future buyer for their home is similar to them and will love the home as much as they do.
Search “Coming Soon” listings. The MLS now has the ability to list homes as “coming soon” for up to 30 days before they are active. You will NOT find these listings on Zillow, Realtor.com, or other third-party real estate websites. Work with a Realtor who can set you up on a search that includes both active and “coming soon” listings and gives you notifications as soon as something is listed. You might even be able to schedule an appointment to view the home and write an offer before it hits the market, eliminating any competition.
Dayv Morgan is a Maricopa Realtor and owner of HomeSmart Success.
This column appears in the August issue of InMaricopa.