Making the best purchase offer in a seller’s market
You’ve worked with a REALTOR® to scour the listings, toured what feels like a thousand houses, and finally found it: the house you want to call home. The next step is to make your purchase offer, and if you are like most people, the prospect can be quite intimidating.
Even though our market is beginning to settle down, it’s still very much a seller’s market. That means even more pressure on the buyer to submit an impressive bid. It begs the question: How can you make sure that the offer you submit is the one that is accepted?
In a seller’s market, home prices are higher, and inventory is lower. This means you are more likely competing with multiple bidders. Those situations are beginning to decrease, but they haven’t gone away. That means in a competitive market like ours, buyers still need every advantage they can get, and working with a REALTOR® to make the best purchase offer is a smart move. And believe it or not, the bid with the highest price is not always the one that wins.
Of course, sellers want to get the best price for their homes, but that isn’t always the deciding factor. Eliminating or reducing the number of contingencies with your bid through things like pre-offer inspections can help make your offer stronger. The bid that causes the least amount of hassle for the seller is the one that will probably win.
However, that doesn’t mean that you should just submit a below-market offer with no contingencies. This is not the time to make a lowball offer. When you are going up against more than one potential buyer, it’s time to put your best foot forward. This might be your one chance to convince the owner to sell their home to you, so it’s even more important to submit your best possible purchase offer.”
If you can pay cash for your home, chances are your bid will be accepted. Sellers appreciate all-cash offers as they usually mean a quick, streamlined purchase. Financing issues, such as delays in mortgage approval or getting funds moved from the buyer’s bank account, are the primary causes of delays in the closing process. If a seller can avoid a lengthy or complicated process by choosing an all-cash buyer, they likely will.
For most people, however, a cash offer isn’t a possibility, and you’ll need to qualify for some variety of mortgage financing. If this is your situation, Getting preapproved for a mortgage before you begin the search process. With loan preapproval, you’ll be able to make a solid commitment to buy, and your offer will be more appealing to the seller.
And of course, the most important thing that you can do to give yourself an advantage is to hire a REALTORÒ. They have real insights and unparalleled knowledge of your local market and can help you navigate the complicated home buying process.
NETAR is the voice for real estate in Northeast Tennessee. It is the largest trade association in the Northeast Tennessee – Southwest Virginia region representing over 1,500 members and 100 affiliates involved in all aspects of the residential and commercial real estate industries. Pending sales, Trends Reports, and the regional market analytics can be found on the NETAR websites at https://netar.us/voice-real-estate-northeast-tennessee.