Tuesday, July 26, 2016 / by Jason Huerkamp
If you were looking for a home to buy in the Twin Cities today, you are going to find that there is not a huge choice of homes for you look at. Not only that, you would also have a hard job getting your dream home without ending up in competition with other buyers for the same house. This effectively means it is a Sellers market right now. There is low inventory and therefore there are fewer home options for you to choose from in the market place today. It means that homes that are priced correctly and reaching the market and are selling very quickly. It means that sometimes the homes in the area you are looking in, probably sell within a relatively short time and often have multiple offers, which does mean the home may sell for more than the asking price. That can be quite stressful for a buyer in the market place today. How can you win the battle of the multiple offer scenario?
- Mortgage pre-approval is of prime importance when you are looking to buy a home and it's even more important when you could be one in a number of people bidding on the same house. It is like being at an auction without the auctioneer. If your financial situation is clear and your mortgage pre-approved you could possibly be stronger financially than the next person also bidding on that home. If you do not have a mortgage representative to work with, please ask our team, we have worked with several different vendors and could easily give you a few names and contact details to interview and find the person you feel most comfortable working with
- Have your downpayment ready and accessible and be able to send the check with the offer on the property you want. That could sometimes be the catalyst that makes your offer more viable and serious than the next one. Sometimes a slightly bigger downpayment will sound better in a multiple offer bid
- Employ an experience realtor and be guided by them. Ask them to:
- Do a CMA on the property
- Find out what the other properties in the area have sold for vs list price and then you can estimate roughly how much extra you would need to put in to get the home
- Can your agent find out how many offers there are on the table
- Can you agent ask if any are cash sales - if there are any cash sales, its a good chance that the house you want will be sold for cash, even if its a little less than you offer. Cash is generally, but not always, king.
- Are there any special conditions the seller would be opting for in preference, for example, do they need more time to move and do they need a rent back?, would they like to move quickly? Do they need a quick closing? Can you accommodate those needs? If you can, that could be to your advantage.
- Before you go out and actively look for a home - select the areas you would be keen to live in and get to know those areas intimately.Understand the pricing of the homes in the area, what has sold and for how much and really become comfortable with the real estate in the area. By doing that you can come in with your highest and best offer maybe even before the seller gets more offers on the property. Honestly - sometimes its a good idea to win the home you want but with the knowledge that you know to be true, as long as you have a really good realtor by your side.
Thinking Out the Box:
- If the Seller hasn't found a home yet, this may be your opportunity to give them two weeks to find a home and you can add that as a contingent in your offer. They can accept your offer and you will allow them to cancel the sale if they do not manage to find a home in those 2 weeks. That is a risky one, but it might just be breathing room for them.