Today’s market just doesn’t allow for much time to think about “is this the perfect home for me?” since the inventory is low, the mortgage rates are low and the demand is high for a home. Multiple offers are fairly common so here are 5 things to keep in mind when making an offer on that “perfect for you” home:
1. Know your numbers – you know that you should be pre-approved before you go house hunting – that will allow you to “pull the trigger” quick. But just because a lender says you are preapproved and can spend this amount – you need to crunch your own numbers on what your monthly payments would look like…not only your mortgage payment but also utilities (unless you buy into an HOA that covers all utilities, but then you need to factor your HOA payment in) – you should also think about future purchases – what is the condition of your vehicle? Will you have to purchase a different one in the near future? Would you be able to with as high of a mortgage payment that you’re preapproved for? This is one that you truly need to think clearly on – think with your brain and not your heart on this one.
2. Brace for a fast pace – according to National Association of Realtors (NAR), the average time on the market for a home currently is 17 days – that means from the day it went active to the day that it went pending is 17 days. Showings, offers, inspections – all done in that time frame. You not only need to look at homes as quick as possible when they are active on the market but also be able to make a decision on whether this house is the right one for you
3. Lean on a Real Estate professional – You need an agent who will help you stay on top of the inventory and be able to write an offer quickly, efficiently and submit shortly after your showing is completed – also someone who can communicate just why you are the best buyer for this home – “my client (buyer) is offering a flexible closing date”, “my client has the ability to purchase without selling a home first” or any other levers to use to help make you stand out among the multiple offers.
4. Make a strong, but fair offer – We all love a good deal – in the past, offering near or at list price was enough to make sellers want to work with your offer. Today, half the homes are being sold above list price. This is where emotions AND prices can run high – it is important for you to be aware of the comps in the area as well as your comfort zone for the payments like we talked about in #1.
5. Be a flexible negotiator – ok, your agent has put the offer together for your “perfect for you home” – the seller may still want to counter with items that they would like…you may need to be flexible on closing date, inspection items that may arise, or even a higher price. One thing that is very difficult to think of is waiving an inspection – it seems fairly commonplace right now however unless you are in the “trades” business and have a trained eye when you’re walking through – knowing the major components to look for such as foundation, windows, the major mechanicals – it is very important to have an inspection contingency on a home. You can write in the offer that you will only ask for items that cost above $1000 or some other magic number – that conveys to the seller that you are not going to be asking for everything little thing that is wrong with the house – just major items if needed.
