Navigating today’s crazy real estate market is very difficult — especially as a buyer. So, for buyers and prospective buyers out there looking for some guidance, here are some tips to help get your offer accepted.
Pick the Right Agent
The number one advice I have is to make sure you pick a savvy agent. Right now, buyer’s agents are truly earning their commissions. It’s harder to find homes due to low inventory, and even if you find a home, you’ll be competing with three to 15 other offers.
By partnering with a savvy agent who has relationships in the industry and knows the area inside and out, you’re likely to have a better chance of getting the deal done. The listing agent has great power in today’s market, as sellers often seek their guidance in choosing the winning offer. If the listing agent thinks highly of a particular agent, that can often help.
As you may know, there are a lot of pitfalls and roadblocks that can come up during the complex escrow process, so having two agents who work well together and trust each other is extremely important. In fact, it can be a major deciding factor.
Forget About Comps
In this market, I would just throw out analyzing the comps when preparing to put an offer on a home. Remember comps are 30- to 90-days old anyhow, and every month in today’s market it just gets hotter. Also, it doesn’t matter if the comps show a property is worth $730,000 when there are seven offers at $770,000.
The market decides and dictates what the value of a home will bring. So, if you feel you’re already going in at the high end of the asking price and there are seven other offers, I wouldn’t miss out because you think the comps are not justifying the price. It’s not the right way to think about this market, since homes are getting bid up so high due to lack of supply and increase in demand.
The better question is, does the home serve your needs right now and will you be happy living there. That being said, you may be asked to sign an appraisal waiver, which means that, should a home appraise at a lower value than the contract price, you agree to bring forth any additional funds to bridge the gap.
Be Careful with ‘Dear Homeowner’ Letters
This one is a controversial topic of interest among Realtors these days due to potential fair housing violations. In case you aren’t aware, “dear homeowner” or “love letters” are letters buyers write to the sellers in hopes of helping their offer get accepted. The issue these days is that some of these letters include pictures of the buyers and can unconsciously cause unfair discrimination when sellers choose their favorite offer.
While these letters can reveal too much personal information, especially if photos of the family are included, you can still write what you love about the home and about your financial strength in closing the deal in order to help your offer be among the top selected by the sellers. With advice and guidance from your savvy Realtor, you can ensure that your letters are done in a way that is careful, yet convincing.
Making the Best Offer
The final piece of the puzzle is your offer. A lot of times, it comes down to who is offering the most money and best terms. This becomes even more important in a multiple-offer scenario, so prepare yourself now. The listing may be for $750,000, but in today’s market that could actually mean $780,000 after the negotiation process is completed.
If you find a home you like, you have to commit to it. Meaning, you have to be willing to put in the most money and offer the best terms in order to get it. You need to “be in it to win it.”
Go in strong and keep your position. In my opinion, the ones who go in the lowest off the bat get dismissed by sellers; the seller is not going to think about their offer compared to others. So, if you’re the type who likes to be cautious and enter offers on the low end, I would rethink that strategy. In today’s market, if you actually want to win at the game and get the home you want, you need to make the best offer.
Heather Wendlandt is a real estate agent with the Kolker Real Estate Group in San Diego.