• English
  • Español
AGENTS: Did you know you can share a personalized version of this post? Learn more!
, ,

5 Tips for Homebuyers Who Want to Make a Competitive Offer

5 Tips for Homebuyers Who Want to Make a Competitive Offer

Today’s real estate market has high buyer interest and low housing inventory. With so many buyers competing for a limited number of homes, it’s more important than ever to know the ins and outs of making a confident and competitive offer. Here are five keys to success for this important stage in the homebuying process.

1. Listen to Your Real Estate Agent

A recent article from Freddie Mac offers guidance on making an offer on a home in today’s market. Right off the bat, it points out how emotional this can be for buyers and why trusted professionals can help you stay focused on the most important things:

“Remember to let your homebuying team guide you on your journey, not your emotions. Their support and expertise will keep you from compromising on your must-haves and future financial stability.”

Your real estate professional should be your primary source for answers to the questions you have when you’re ready to make an offer.

2. Understand Your Finances

Having a complete understanding of your budget and how much house you can afford is essential. The best way to know this is to reach out to your lender to get pre-approved for a loan early in the homebuying process. Only 44% of today’s prospective homebuyers are planning to apply for pre-approval, so be sure to take this step so you stand out from the crowd. It shows sellers you’re a serious, qualified buyer and can give you a competitive edge if you enter a bidding war.

3. Be Ready to Move Quickly

According to the Realtors Confidence Index, published monthly by the National Association of Realtors (NAR), the average property being sold today is receiving more than three offers and is only on the market for a few weeks. These are both results of today’s competitive market, showing how important it is to stay agile and vigilant in your search. As soon as you find the right home for your needs, be prepared to work with your agent to submit an offer as quickly as possible.

4. Make a Fair Offer

It’s only natural to want the best deal you can get on a home. However, Freddie Mac also warns that submitting an offer that’s too low can lead sellers to doubt how serious you are as a buyer. Don’t submit an offer that will be tossed out as soon as it’s received. The expertise your agent brings to this part of the process will help you stay competitive:

“Your agent will work with you to make an informed offer based on the market value of the home, the condition of the home and recent home sale prices in the area.”

5. Be a Flexible Negotiator

After submitting an offer, the seller may accept it, reject it, or counter it with their own changes. In a competitive market, it’s important to stay nimble throughout the negotiation process. Your position can be strengthened with an offer that includes flexible move-in dates, a higher price, or minimal contingencies (conditions you set that the seller must meet for the purchase to be finalized). There are, however, certain contingencies you don’t want to forego. Freddie Mac explains:

Resist the temptation to waive the inspection contingency, especially in a hot market or if the home is being sold ‘as-is’, which means the seller won’t pay for repairs. Without an inspection contingency, you could be stuck with a contract on a house you can’t afford to fix.”

Bottom Line

Today’s competitive market makes it more important than ever to make a strong offer on a home, and a trusted expert can help you rise to the top along the way.


Members: Sign in now to set up your Personalized Posts & start sharing today!

Not a Member Yet? Click Here to learn more about KCM’s newest feature, Personalized Posts.

3 replies
  1. Judy Hanrahan
    Judy Hanrahan says:

    Competing with multiple offers is stressful and your suggestions are good. I am especially in agreement with the comment from Freddie Mac. Sadly, too many agents and sellers will reject an offer with an inspection contingency no matter the offering price. Some agents will advise their buyers to get a pre-inspection before they write the offer. And some listing agents will state that HIC contingencies will not be accepted but allow a pre-inspection.. So that means the buyers will be paying upwards of $400 to get a chance to bid on the house. Another part of the problem during the Covid era is that the number of people who can be in the house for showings or inspections is limited (locally only 3 people) So a pre-inspection or multiple inspections, each of which will take several hours, will limit showings and possibly eliminate other buyers. I had recent buyers for a property where there were 6 competing offers. My clients put in a 3 day HIC and were rejected. One buyer eliminated the HIC, but did not get the house. The ultimate buyers and the other prospects did a pre inspection, so 3 prospects spent @ $400 to no avail. I liken it to buying a lottery ticket for hundreds of dollars. IMO instructing a buyer client to forego an inspection or telling them to pay money for a pre- inspection with no guarantee they will get the house is unethical. How many times can a buyer do that??? As a listing agent for 40 years, I tell my sellers that buyers have a right to know what they are buying and a home inspection can protect the sellers in case there are problems they are not aware of, eliminating the risk of a lawsuit after settlement for non-disclosure. But I also alert buyer agents that a HIC must be for 5 days or less.

    Reply
  2. Afton Jackson
    Afton Jackson says:

    Wow, I never knew just how aggressive the market has become for new homebuyers. This really helped to read as I had wondered if people were still buying houses as much as they were before and if I should also take the same mindset, seeing as how I have never attempted to buy my own house yet. I’ll keep this in mind as I start looking for house listings for sale in case there might be a time that I would need to make a quick offer.

    Reply

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *