Buyer Tips In a Seller’s Market
May 1st, 2013
Caveat emptor means buyer beware. But what we need right now is a phrase for “Buyer be aware!” At least you need to be aware if you're a Madison buyer house hunting in the $200 – $400K range. Well-maintained houses listed in this price range in desirable neighborhoods are barely on the market for an entire day before the showings – and offers – pile up. It's not unusual for a buyer to submit an initial offer at full price and still face counter offers due to the seller having multiple buyers to choose from. This seems especially true right now on the near west side and for downtown condos. Again, most of the homes we see going fast are within a certain price point, but the following tips are useful to any buyer who wants an accepted offer.
1. While price may not be the number one concern for some sellers, if you know there are other offers either in place or coming in, then the asking price should be the minimum you offer. And you may have to prepare yourself for paying more than the asking price. This is, of course, assuming the house is priced close to appraised value to begin with.
2. Show your intent by putting down a larger earnest money deposit. This may make your offer more attractive to the seller. You'll pay it at closing regardless, so if you can, put more down upfront.
3. Be stingy with contingencies. Unless you absolutely have to include them, think long and hard before asking the seller for a sale contingent upon keeping the dining room fixture they plan on taking with them. Sellers are likely to be more open to an offer with fewer contingencies.
4. Be ready to buy with a preapproval letter and proof of funds in hand. If possible, make the preapproval letter specific to the property (date of offer and sale price). This may be easier to do if you work with a local lender who can respond quickly to your needs.
5. Work with a good buyer agent. It's not secret the real estate agent you work with can make a difference. Are they aware of properties as they come on the market, or preferably before they're even listed at times? Do they know what fair prices are in the neighborhoods you're looking in? Are they willing to talk to the listing agent to glean any tips that may help you craft an attractive offer?
It's true sellers can choose whatever offer they want for whatever reason (and it's not always logical), so do yourself a favor and put your best offer forward at the start. You may not get a second chance.