You’ve worked with a REALTOR® to scour the listings, toured what feels like a million houses and finally found it: the house you want to call home. The next step is to make your purchase offer, and if you are like most people, the prospect can be quite intimidating. In a seller’s market, there can be even more pressure on the buyer to submit an impressive bid. So how can you make sure the offer you submit is the one accepted?
“In a seller’s market, home prices are a bit higher and inventory is lower,” said Jennifer Pederson, President of the Snohomish County-Camano Association of REALTORS®. “This means you are more likely competing with multiple bidders. In a competitive market like this, buyers need every advantage they can get, and working with a REALTOR® to make the best purchase offer is a smart move.” And, believe it or not, the bid with the highest price is not always the winner.
“Of course, sellers want to get the best price for their home, but the offer price isn’t always the deciding factor,” Pederson said. “Eliminating, or reducing, the number of contingencies with your offer through things like pre-offer inspections can help make your offer stronger. Typically, the offer with the least resistance (lowest risk for the seller) has been the probable winning offer.”
However, this does not mean you should just submit a below market offer with no contingencies. “This is not the time to make a lowball offer,” stated Pederson. “When you are going up against more than one potential buyer, it’s the time to put your best foot forward.” This might be your one chance to convince the owner to sell their home to you, so it’s all the more important to submit your best possible purchase offer.”
If you can pay cash for your home, chances are your bid will be accepted. Sellers appreciate all-cash offers as they usually mean a quick, streamlined purchase. Financing issues, such as delays in mortgage approval or getting funds moved from the buyer’s bank account, are the primary causes of delays in the closing process. If a seller can avoid a lengthy or complicated process by choosing an all-cash buyer, they likely will.
For most people, however, a cash offer isn’t a possibility, and you’ll need to qualify for some variety of mortgage financing. If this is your situation, Pederson recommends getting preapproved for a mortgage before you begin the search process. “With a loan preapproval (ideally through underwriting), you’ll be demonstrating a solid effort and commitment to purchase as well as making your offer much more appealing to the seller,” stated Pederson.
And, of course, the most important thing you can do to give yourself an advantage is to hire a REALTOR®. “REALTORS® have real insights and unparalleled knowledge of your local market and can help you navigate the complicated home buying process,” said Pederson.
For more information about buying or selling a home be sure to work with a REALTOR®, a member of the National Association of REALTORS®. Snohomish County-Camano Association of REALTORS® is the voice for real estate in Snohomish County. If you have questions for The Expert about real estate, email us at firstname.lastname@example.org or by visiting www.sccar.org.