4 Tips for a Winning Offer
Newsflash: Home inventory across the DMV is low!
[Gasp!]
Yes, it’s true. But if you’re a homebuyer currently in the market for a new home, this isn’t news to you; You’re already well aware of the competitive nature of the local market, and this is especially true for those searching in the entry to mid-level markets. But don’t despair, below are a few tips that can help you get a leg up on the competition, and write a winning offer.
1- Be educated
Knowledge is power, and this is the single most important tool a homebuyer can wield. Before you jump into the car and race off to open houses and private showings, insist that your agent sits you down (or dials you up on Zoom) and takes you step-by-step through the home buying process. This is the ideal time to discuss the situations you may encounter and the potential solutions at your disposal. Do this even if this isn’t your first time buying a house, as you’re guaranteed to learn something new.
When the time comes to submit an offer, there are SO MANY more variables than just the sales price, and it’s best to know that ahead of time. In competitive situations you’ll often hear the term “minimal contingencies”, and this education session is where you can begin to unpack how to compete with that goal in mind.
Perhaps you aren’t comfortable waiving a home inspection, but you’re in a position to perform a pre-inspection.
Maybe you would be OK waiving the appraisal contingency (as it’s protected elsewhere; Ask your agent).
Maybe you can offer a substantial EMD, or you have the ability to close quickly.
Each one of these is an example of a way to strengthen an offer, but don’t wait until the day an offer is due to begin discussing your strategy. By educating yourself and making a plan early you’ll set yourself up for maximum success.
2- Be Timely
The DMV market moves fast. FAST. So don’t kick the can around when something becomes available that may be a good fit. Call your agent, and get in there ASAP. This will give you a bit of a runway to begin implementing your attack plan for an offer. In an environment that favors offer deadlines (- A definitive time the seller and listing agent set for all offers to be submitted) you’ll want to maximize the time you have to work out the details of your offer. (Maybe you even have your agent put in a call asking if the seller would accept an exceptionally strong offer prior to the deadline?). Be sure you’re set up on a user-friendly MLS source so you’re staying up-to-date on the most recent listings. (All our clients use RealScout.)
And in the vein of being timely, if you’re at this point, you should already have a full pre-approval from a lender you trust and/or your agent recommends. You don’t want to find yourself in a situation where your ideal home has come on the market, but you can’t get a pre-approval in time to submit an offer. It’s not only a bummer, but from that point on you’ll compare every home you visit to “the one that got away”.
3-Be communicative
Not only should you be fully open and transparent with your own agent, but you should be confident they’re openly communicating with the listing agent. As mentioned above, there are many variables to an offer, and while price is generally the most important detail to sellers, you may be surprised to find they have a strong preference or need in regards to one of the other terms as well. Often the sellers of vacant homes want to close quickly, or on the opposite end of the spectrum, maybe a family need to identify and put an offer in on their next home. Both of these situations should affect the timeline included in your offer, but you’ll only know about them if your agent reaches out and asks questions of the listing agent.
In a multiple offer situation, don’t be the offer that comes in last minute with no warning; It’s far better for your agent to have established at least a small relationship with the listing agent, gathered information about the sellers, and prepped them for the incoming offer.
4- Be Flexible
This is Washington DC and we’re notorious for our abundance of type-A personalities. It’s fantastic that you have your ducks in a row; You know exactly what your credit score is, the balance of your bank account, retirement accounts, and Roth IRAs down the penny, and precisely how much your monthly payments are going to be. But, don’t let your fearless-leader nature stand in the way of buying your dream home. This is life, and things don’t go exactly as planned, that’s for certain, and that’s OK.
When you’re in the early stages of planning your purchase, be sure to think through different situations and how to be best prepared for them. Allow yourself to keep an open mind and be thoughtful about your options. Your agent and lender are the integral components of your real estate “team”; Be sure to listen to their suggestions, and if something doesn’t quite make sense, ask them to clarify. Buying and selling homes is what they do all day, every day, and it’s quite literally their jobs to be problem solvers, so take full advantage of their expertise and trust their advice.
And a very important final reminder; You’re searching for the best home you can find for the best value, while the seller is trying to maximize their investment. Eventually you’ll be in their shoes, so work together to find a common solution for each of you. A ratified contract is the result of “a meeting of the minds”, so be judicious about letting your mind make the decisions and not your emotions.
If you have any questions about the steps mentioned above, or some of the specific examples cited, please feel free to reach out; My team and I are always more than happy to offer sound advice that helps to elevate our industry. If you think we may be a good fit in your own home search, let’s set up a brief call to discuss. Of course, this is 2020, so if you’re more comfortable texting, emailing or Zooming, that works too.
Happy House Hunting!
Want to stay up-to-date? Click here to follow this blog.
