There are more buyers than homes available and buyers are competing to purchase homes. Multiple-offer situations can be frustrating. Being prepared, having a strategy and being patient and open to change can help.
Every buyer should be pre-approved for a loan. Pre-approval is conditional approval for a loan and requires that you complete a mortgage application. To get pre-approved, a lender will look at your credit score, income, debt and other financial information. With a pre-approval letter from your lender, you show sellers you’re serious and have the ability to borrow enough to pay for a home.
Nothing is fool-proof, but there are ways to make your offer stand out against the competition. First, find out what’s important to the seller and give them what you’re able to give. They want to close on the home and rent it back for 30 days. If you can accommodate that, your offer will stand out. Don’t make a low-ball offer and hope to negotiate. Sellers are likely to have other offers to consider. If yours is low, they may not even talk to you. Make your best offer first.
An offer over asking price is appealing, but sellers don’t accept offers on price alone. They want an offer that will make it to the closing table and not fall apart. You could agree to cover any difference between a low appraisal valuation and the purchase price you offer, which helps avoid problems later. Lenders won’t give buyers a loan for more than a home appraises, but if you can cover any difference with cash, that will help make your offer stronger.
Be patient and flexible. Rather than looking at homes at the top of your price range, which doesn’t give you much room to out-bid competitors, look at less expensive homes. You may want to look at older homes or homes in a different part of town. You should evaluate your “must-have” list and understand that you may not get some of the features on your “would be nice to have” list. If you lose out on some homes you wanted, understand that the right home will come along.
We don’t recommend giving up important contingencies just to land a deal. Some agents may recommend you forgo an inspection, for example. Inspections help buyers avoid buying a home with problems and we recommend every client get one. You can, however, make sure the inspection happens quickly so sellers aren’t waiting long to find out what you’ll find. We don’t recommend paying more than you can really afford for a home. We think it’s better to adjust your expectations and live in a home you can feel comfortable paying for.
Our experience tells us that people end up in the homes they were meant to live in. If you don’t get the first (or second, or third) home you want, there will be another chance. Don’t give up!
Ready to get moving? Give us a call.
Reach David and Tom at The Principal Team at 720-408-7409.
Metro Denver Real Estate Market Activity
It was another banner week for closings and properties going under contract. Interest rates did tick up a bit and may slow the market a bit, but there wasn’t a sign of that when we look at the large number of homes pending.
The National Association of Realtors® 2019 Profile of Home Buyers and Sellers indicates that buyers visited 10 homes before they made an offer. With the market as competitive as it is, buyers may go see many more homes before they make an offer that’s accepted. We recommend viewing virtual tours and looking carefully at neighborhoods and all available photos to ensure you’re visiting homes that can really work for you.
During the last week:
New Listings – 1389
Back On Market – 330
Price Increase – 298
Price Decrease – 1016
Pending – 2361
Withdrawn – 201
Closed – 2022
Expired – 257
New Listings – 1445
Back On Market – 327
Price Increase – 228
Price Decrease – 963
Pending – 2310
Withdrawn – 194
Closed – 1742
Expired – 246
Based on data from REColorado®