Many markets across the country (including our very own Nashville market) are experiencing low home inventory and an influx of buyers, in large part due to the record low mortgage interest rates.
So what happens to price when you have low supply and high demand? In short, that price increases. When a house is priced appropriately to the current comps in the market, we are seeing the number of offers being in the double digits as the new norm. Case and point, just two weeks ago we had a listing with our team that had 100 showings in just the first weekend of it being on the market. The seller received 20 offers!
This news is great for sellers as they are receiving much higher offers on their homes than they normally would. Conversely, this has been a tragedy for many who are left in the growing crowd of home buyers still searching for a home.
So how can you position your offer to rise to the top in a multiple offer situation? Here are 3 simple but sure ways to give yourself an edge over the competition.
1. Act quickly and decisively
With such a competitive market, you must be ready and willing to act quickly. If you don’t act quickly, someone else will. Your real estate agent in the local market you’re buying in will be the best person for you to listen to. They are the boots on the ground working in the trenches day in and day out. They have their ear to the ground and their finger on the pulse of your market, so working with an agent you can trust to advise you is crucial. Real estate is hyper local; just because real estate is very hot in one neighborhood, it could vary dramatically in the next neighborhood over. You will have the best advantage over other offers if you listen to the advice of your experienced agent and act immediately on their advice.
2. Speak with a lender
You need your financing ready to go before you even begin looking at homes. Having a strong pre-approval letter from a trusted lender can and will go a long way for the strength of your offer. Not only should you include the pre-approval letter in your offer to the seller, you can also ask your lender to call the listing agent on your behalf to assure them that your financing is sound. This phone call carries a lot of weight with sellers in reassuring them that you are a strong buyer who is ready financially to close. This works best if you can get conditionally approved with your lender for your purchase price before even making the offer. If you’re already conditionally approved for that purchase price, all that’s left after winning the offer is to have the inspection, appraisal, and title work to close.
3. Keep the offer as clean as possible
The name of the game here is few contingencies. Your agent will be able to best guide you through this process. Sometimes price is not the only motivating factor for sellers. Have your agent reach out to the listing agent with a phone call and ask this question verbatim: “Other than price, are there any other factors that are important to the seller?” Whatever you learn from this phone call, make sure you address those factors in your offer.
For example, it may be that the seller doesn’t want to deal with the headaches of negotiating repairs. A great option to addressing this in your offer would be to make the inspection a pass or fail inspection.
Maybe you learn in that phone call that the sellers need a quick closing. In this case, since you followed my advice in point #2, you’ve already gotten a pre-approval letter (and hopefully conditionally approved) by a lender. Or better yet, maybe you can just pay cash to ensure a faster closing for them. After you pay cash and close on the house, you can use Delayed Financing and get 80% of your money back out of your house to reinvest elsewhere or keep liquid.
Most importantly, don’t make your offer complicated. Keep your offer very clean and simple. The easier you and your agent are to work with, the better your chances are at winning the offer to your dream home.
If you want the edge on the competition, then act quickly, get preapproved before you make an offer, and keep your offer clean and simple.