We’ve all been hearing it here in the SoCal real estate market for months, whether as a buyer’s agent when asked “How’s business?” or as a home buyer when asked “So how is the house hunting coming along?” Nine times out of ten the answer is usually “There are not enough houses for sale!” Or maybe the answer is “There are always ten other offers on the table and we keep getting out bid!” Yes, it’s true that the low inventory of homes on the market right now is creating quite a challenge for home buyers and their agents but does that mean all hope is lost? Not in the least. The fact is you can increase your chances of having your offer seen by just following a few simple strategies.
Let’s talk contingencies. By no means would I ever suggest that you do not have any contingencies on your offer to make one of the biggest purchases of your life—they are in place to protect you after all. But do keep in mind, the fewer you have, the less of a potential flight risk you are going to be in the eyes of a seller. If at all possible, limit yourself to one really good contingency such as the physical inspection which should cover most of your concerns when using a reputable company. By limiting your demands to just one will give you a more competitive edge.
Show me the money! Sellers worry about the buyers buying power especially when you start to draw near to the close of escrow. Pre-approval letters are one way to give the sellers peace of mind and make them more likely to consider your offer. Please keep in mind that a pre-qualification letter is not a pre-approval letter. The pre-approval letter is based on verified information and is the only one that will hold water at the end of the day when it comes time to present your offer to a seller. Also know that if funds need to be verified and it is not included in the preapproval letter, you should include a copy of your bank statement with the account number blacked out and submit that with your offer as well.
You snooze you lose! Yes, like the saying goes time is of the essence and that certainly applies to buying a home. Sellers want buyers who are ready to “pull the trigger” and if you write an offer that for example is contingent on your co-buyer who is still hemming and hawing to make a decision or who may be always unavailable or out of town and unable to commit, the seller is going to move on. They do not want to take the risk of removing the property from the market when they do not know whether or not the undecided co-buyer is going to commit or not.
Kick the tires. Sellers prefer you to view before you buy. While you can certainly get a good idea off of an internet ad as to whether or not the property has potential be a good fit for you or not, without actually viewing the property in person, it’s hard to know for sure. The fact is that some buyers buy property without having seen it in person but they generally need to make an impressive offer price and often offer to close fast to be considered. Writing a “blind offer” as this strategy is often referred to can be risky and it is always better for everyone if all buyers have viewed the property before an offer is made. That way there is less of a chance of “Oh my…I didn’t see that 5-story apartment building hovering over the property in the photos online.” or “Wow…that neighbor really does like to display his collection of unassembled cars in his front yard doesn’t he?” Or my favorite, “Is that a goat farm?” Nobody likes surprises. Not either side of the transaction.
Get out your crystal ball. Always try to address any conditions that could be a potential turn off to sellers prior to making an offer. For example, if there are any special conditions with the financing you are going to be securing to make the purchase, make sure you review these conditions thoroughly with your lender so that you are prepared with all the documentation that is required for underwriting and so nothing causes the loan to go south in the 11th hour, subsequently forcing your deal to fall out of escrow.
All in all, if you sort out your concerns up front, get your financial ducks in a row, don’t ask for the sun the moon and the stars in contingencies and in general, write a clean offer in a timely fashion, you will improve your chances of having your offer not only viewed but accepted. I hope these tips help…good luck out there!