How to beat out other homebuyers when there is no inventory
It’s an extremely tough market out there for potential homebuyers right now. The hand dealt with you contains very little inventory, outrageous home prices, and tight access to credit. Given these circumstances, every little thing that you can do to push your name to the top of the seller’s list is pivotal.
Bill Bisset, Agent in the Southeast Valley Association of Realtors, provided a very thorough list of how buyers can beat the competition, especially when there is barely any inventory. He breaks the tips into three categories: Preparation, making the offer, and standing out.
Have your finances in order: Know how much house you can truly afford, repair any credit issues, have your down payment in hand, and delay major purchases.
Get pre-approved for a mortgage, over and above getting pre-qualified.
Determine in advance which home features are “must-have” and which features are “nice-to-have.”
Know what contingencies you are willing to eliminate from your offer.
Be prepared to make an offer quickly if you find a home you like. There is no time for dawdling on a decision in a seller’s market.
Hire a Realtor to help you locate, select, and negotiate.
Don’t wait until Saturday or Sunday to house hunt. Have your Realtor make appointments to see homes as soon as possible, even if it means trotting out on your lunch hour.
Making The Offer:
Assume that you will not have the opportunity to negotiate on price, so make your best offer upfront. Provide the cleanest purchase contract possible, with the quickest closing time and fewest contingencies as advised by your Realtor. Agree to pay the seller’s closing costs, which puts more money into the seller’s pocket without raising the purchase price and therefore jeopardizing the appraisal. Pay with cash if possible; if not, consider increasing the amount of your down payment. Don’t go out of town or be otherwise inaccessible to your Realtor in case the seller has questions about your offer. If there are questions, respond ASAP.
Amp up the traditional letter to the owners with photos of your family or pets, personal recommendations, or a sentimental memento of the home they are leaving behind (Here is a sample cover letter).
Include incentives that are not related to the house, such as airline tickets, in your purchase offer.