In quarter 2 of 2018, the median sales price of sold homes in the US was $255,000, up 6.3% from the year before. For today’s home buyers, these numbers come to no surprise. Homes for sale in top markets and neighborhoods are almost impossible to obtain, as homes this spring and summer have flown off the market in record time. And boy, is it frustrating! In fact, 55% of homes sold in July were off the market within a month, according to NAR. A month and a half into quarter 3, the market is slowing down but buyers still find themselves in multiple bid situations.
We’re in a very emotional market with the lack of inventory and influx of buyers still on the market right now. If a property is priced aggressively and shows well, some properties can sell within 3 days. If you’re a home buyer looking to buy in today’s top markets, it’s important to set yourself up as the most desirable buyer:
Tip #1: Put your best offer in immediately.
In a hot market, sellers are less inclined to negotiate their asking price because, well, they don’t have to. There will be other buyers out there that will be more than willing to put in a higher offer.
Tip #2. In a bidding war, choose between the following:
- Conventional (20% , 15% , 10% , 5% , 3%)
- FHA 3.5%
Majority of the time, a seller is going to look for the highest down payment, so the higher your down payment, the chance you will be outbid are less. Cash is king! Sellers are more likely to favor buyers who pay in cash. If using a low down payment loan option, you can outbid higher down payment buyers with a higher offer.
Tip #3. Only ask for closing cost credit or minimum amount if you have to.
If you gave a higher offer but try to offset it by asking for a closing cost credit or minimum amount, you won’t be as desirable and your offer will become less competitive with others. Sellers like clean offers. If you can afford it, avoid asking for any credits.
Tip #4. Give at least 1-2% of the earnest money.
If you can afford it, this is great way to earn brownie points with the seller. Not only will this extra deposit prove you’re a financially solid buyer, but you’ll be able to use the extra cash deposit as a leg up when competing with other buyers with the same loan type.
Tip #5. Include a personal letter to the seller.
You will find that sellers are just as emotional as buyers. A lot of sellers feel good that their home will be passed onto a buyer who is excited to purchase their home. It’s almost a form of flattery!
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Dealing with a multiple bid situation? I can help!
Contact me for more tips or for help finding your home.
👩🏻💼 Leticia Lara, Real Estate Agent