This market has changed a lot over the last couple years. Inventory is slim, and buyer demand is very high. This is creating multiple offer situations and bidding wars with many listings that come on the market. Follow these 5 steps to prepare and give yourself the best shot at getting your offer accepted.
1. Talk to a lender – get prequalified at the least. Better yet, get pre-approved. This will make less work for you and your lender down the road. And it will give you a very clear sense of your affordability, monthly payments, etc. You will also know the strongest offer you can comfortably make in a multiple offer situation.
2. Know the Inventory. Follow listings on a web portal - ask your agent for access to the MLS portal so you can follow listings in your price range. The more houses you see, the better informed your decision when writing an offer. Because these listings are selling fast, you’ll feel more comfortable and confident writing a quick offer if you’ve been keeping tabs on the market. You’ll also educate yourself on values. Some agents are drastically under-pricing listings (i.e. seller is facing imminent foreclosure), which will ultimately create a bidding war and the accepted offer will be well above the listed price. This can be disconcerting for buyers who don’t understand why a full asking price offer won’t get it done. If you follow the market and inventory, then you will know yourself when a listing is under-priced, over-priced, or correctly priced. Sites like Zillow and Trulia can be used to follow listings; however, they tend to not be 100% accurate. If you’re gonna use these sites, use them in conjunction with a MLS portal account to check accuracy of data.
3. Review the Purchase Contract even before finding a property to write an offer on - spend some time with your agent and review the contract because in many cases you will need to get an offer together quickly. I’ve been with clients showing them property at 3 PM and find out the seller is reviewing offers at 5PM that evening. It’s much easier to stomach putting an offer together quickly if you’ve already familiarized yourself with a contract.
4. Don’t just focus on new listings - look at listings that have been sitting on the market, or that have just fallen out of escrow. You’ll eliminate the frenzy, and might be able to negotiate with a motivated seller.
5. Find out the details of the listing - who is the seller? how are they handling offers? what terms are they looking for? In a competitive situation, you will want to cater your offer to the seller’s preferences as much as you can, so they look at your offer more favorably than the others.