With a national shortage of housing inventory coupled with more qualified buyers…The pandemic has made Buying a property harder than in any other market before. Competition is at an all-time high. I am a licensed Realtor in the state of Pennsylvania. Here’s a quick guide to help buyers get an offer accepted in a multiple offer situation aka… a bidding war.
Rule# 1… Be number 1!
Being the first to the showing of a property, allows you to have the first opportunity to make a decision and be the first to offer. This could give you the competitive edge along with other components of a great offer. If your offer satisfies the seller, there may be no need to look any farther.
Cash is King.
During these highly competitive times, the buyer with the most cash/ savings will likely win! Even if you are not cash heavy initially, as the buying process prolongs, you should be saving every penny toward the next opportunity to offer. Cash gives certainty to the seller that a closing WILL take place with or without financial assistance of a 3rd party. A larger Earnest deposit is attractive. Putting more money down will show your level of interest in the property. If you are truly interested in a property, your deposit should reflect it. The presence of cash supports a good offer.
Get a Good Real Estate Agent!
Get an agent with a STRONG personality. One that’s charismatic, friendly, but annoyingly aggressive. One that’s knowledgeable and not afraid to ask the hard questions. A memorable agent is needed for the multiple offer scenarios. Persistent buyer agents are those that seller agents will remember. They’ll help you get under contract.
Less Haggling.
Know your bottom line. Know what you want and absolutely will NOT have as far as features and pricing. Is this your “forever” home? Don’t waste your time looking at properties that do not meet your basic needs. Property features such as fireplaces and decks may matter to you but the quality or condition of the property itself is even more important. In this market, there’s not much room for negotiation on minor issues or repairs. There is a trend during the Covid-19 pandemic where buyers are waiving home inspections to be more competitive. As a real estate professional, that is absolutely NOT advised. You want to make a good purchase decision that allows you to get what you want without having buyer’s remorse. Property Inspections can reveal expensive defects in a property such as structural and utility damage including plumbing, electrical, heating etc. Homeownership naturally comes with problems. Waiving inspections is like inviting problems over for breakfast. Do not get so caught up in competition that you end up hurting yourself in the long term. You can reduce and enhance stipulations but do not waive those that are there to protect you.
OverBidding.
Bidding over the asking price may be necessary but you have to keep it within reason. Overbidding can affect your mortgage payment and your overall cost to close on the property. You have to evaluate if it’s worth it. An increase of $10k in the purchase price can increase your mortgage payment by $20+ per month. That may be worth avoiding the headache of being in more bidding wars, the gas prices of continuing a home search, or relocation expenses such as rent, bills, etc. In contrary, waiving $10k in sellers assistance will directly increase you closing costs by $10,000.00. Is it worth it? You don’t want to over-do it and give up your negotiating power. However, sellers would like as much money as possible… as soon as possible!
These are just a few ways that can help you stand out in the buying process during the pandemic. As intense as the process can get, remember to be intentional but remain patient. What’s meant to be… will be! Not sure if you want to purchase a home during times like these? Here’s what you need to know. For more information, email: membership@theinvestorsmith.com
