Spring is when the real estate market goes crazy ‘round these parts. Sellers feel like their home will sell for more when the trees are in bloom, so most people wait until then to put their homes on the market, which has in turn trained buyers into thinking they need to wait until spring. In this market, there are really more buyers than there are viable properties to purchase, so competition to be the best offer is how you’re going to win.
Be prepared to write your best offer at a moment’s notice. That means:
- Have your loan set with the best lender for you (maybe not your bank). It doesn’t cost you anything to shop around for the best deal, and that includes a good timeline. Ask any potential lender how many days they need to close, assuming you give them your required documents without delay. You don’t want to lose out on an offer because your lender needs over 30 days to close (21 days is great).
- Know what your closing costs will be so you know how high you can go in your offer. Your agent may know that there are multiple offers, and advise the use of an escalation clause. If you bid up, you need to know how much you’re willing to spend to get this property, and if it’s coming out of your pocket, or will be covered by your lender. It helps to look at properties that aren’t up against your hard stop. If the sales price is already at your max budget, you won’t have escalation wiggle room. Note: lenders will not lend over the appraised value of the property, so if your offer is more, the difference comes out of your pocket. (Nutshell: offer $915k, appraises for $900k, you’re on the hook for $15k.)
- You can pay out of pocket to get the home inspection done prior to having your offer accepted. In a multiple offer situation, sellers’ agents are generally looking for the highest offer with the fewest contingencies, and this would be one fewer.
- Don’t be afraid of a little renovation. Most area buyers are eyeing only homes that are perfectly painted and done, which means the ones that need a little work are going to be less like chum in the water. You can take a contractor with you when you see a home for an estimation on the time and money it’ll take to make it how you want it.
- Be accessible. During the frenzied hours when the seller’s agent is going over multiple offers, pitting one against the other, getting the best deal for the client, you need to be reachable. You may miss out if your agent can’t ask you if you’re okay with the terms needed to outmaneuver the others. It may not be just about price, but specific terms that the seller is looking for, like closing sooner, offering the seller time in the property past closing (perhaps free of charge), or help packing – whatever it takes to win. Your agent is not authorized to make decisions on your behalf.
You’ve got this, friends. Have fun in your search!
Heather Schoell is a Capitol Hill REALTOR® with Berkshire Hathaway HomeServices PenFed Realty and can be reached at [email protected], at the office at 202-608-1882 x111-175, or by cell at 202-321-0874.