You’ve worked with a Realtor to scour listings, toured what feels like a million properties, 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.
When home buying in a seller’s market — like the one that Orlando has been in for the last few years — there can be even more pressure on the buyer to submit an impressive bid. So how can you make sure that the offer you submit is the one that is accepted?
“In a seller’s market, home prices are a bit higher and inventory is lower,” explains Orlando Regional Realtor Association Chairman Zola Szerencses from RE/MAX 200 Realty. “This means you are more likely competing with multiple bidders so buyers need every advantage they can get, and working with a Realtor to craft the best purchase offer is a smart move.”
Believe it or not, the bid with the highest price is not always the one that wins.
“Of course sellers want to get the best price for their home, but that isn’t always the deciding factor,” says Szerencses. “Eliminating or reducing the number of contingencies with your bid, such as pre-offer inspections, can help make your offer stronger. The bid that causes the least amount of hassle for the seller is the one that will often win.”
That doesn’t mean, however, that you should just submit a below-market offer with no contingencies. “This is not the time to make a lowball offer,” says Szerencses. “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, Szerencses recommends getting preapproved for a mortgage before you begin the search process. “With loan preapproval, you’ll be able to make a solid commitment to buy, and your offer will be more appealing to the seller.”
And of course, the most important thing that 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,” says Szerencses.
Source: “Homebuying tips for purchasing in a seller’s market,” Orlando Regional Realtor Association