How to WIN when buying a home
One of the biggest mistakes you can make as a home buyer – after not being prepared – is to not be in the mindset of crafting a strong, winning offer. Listen, I like spending time with a lot of my amazing clients but creating a friendship is secondary to the main goal – which is find & winning a home! The past 5 years have seen low inventory (homes to available buyers) and regardless of interest rates, that part of not going away any time soon. The illusion that you can dip your toe in the waters of home buying or write an overly ‘safe’ offer and win, will eventually lead to frustration, burn out and the loss of this home buying dream.
Here's where I can help. I’m here to offer you insight into what today’s buyers are doing, offering, and how they are winning. Because I also list homes for my seller clients, I’m seeing real-time offers and having real-time conversations with buyers in your same or similar markets. I will share these insights with you, and craft my advice on our offer to be both timely and competitive with the market demands, and also the safest offer we can create for you as buyers while still being competitive.
So, what does all this mean? It means, that when we’re ready to talk about or write an offer, we’ll review not only the price but also the terms of earnest money, inspections and appraisals.
Here’s a quick example, with a breakdown of key offer components:
- PRICE
If our chosen home as been on the market < 5 or so days and/or has offers already, we need to be prepared to go over asking, possibly use escalation addendums and write the strongest/highest offer we are able to on this home. Period. If our home has been on market longer with little or no competition, this could be a gem that we can buy for asking or under asking
- EARNEST MONEY
This is your money – not additional money to the sellers – showing you are a serious buyer and it’s held until your down-payment is due at closing. While usually anywhere from 1-3% of the purchase price, a higher EM offer can showcase your seriousness to the buyer. I recently was on the list side of a home which received a $40,000 EM term and it was the offer we chose
- INSPECTIONS
I’m going to be real with you here – other buyers are waiving inspections. And their offers, if everything else is equal, win. Why? You, as home buyers, are strangers to the seller, and any safety the seller can secure is a benefit to them. A strong offer can still include the general inspection contingency (many times “for information only” but still a contingency of sale if something catastrophic were found; or an inspection without contingencies attached); and a newer home might call for you waiving this contingency and having your inspection once you close. We’ll discuss these variables but having a very strict outlook on this with an inability to flex based on the home, the competition and my advice, will only lead to frustration on your part. Knowledge is power and I will arm you with that power
- APPRAISAL
When there are no offers on the table, we can often forego writing in appraisal gap coverage. What does coverage mean? If the home appraises slightly below the price we’re offering, you will still purchase the home for the price agreed on by all parties. Appraisals are opinions of value and can vary widely depending on the experience of the appraiser who your lender hires. In competitive situations, sellers are looking for you to “back up” your high offer with some skin in the game – which is, some offer of full or partial appraisal gap coverage. Food for thought – every single competitive offer package I’ve written in the past 3 years that has WON has included ‘some’ appraisal gap coverage ($5k, $10k, 20k, or more). We need to know your finances and what is possible – but be prepared that this is expected. I’ve yet to have a client who regretted offering it after they won the home
In a sentence … I encourage you to Be Bold. Home buying is not the arena to be led by fear, rumors or beliefs that aren’t based on reality. Home buying should and will be fun & exciting if you are in it to win it once you find a home that fits for you. I’m here to guide, offer my expertise & help you into a home that will create a haven for you, better your life, and provide years of financial freedom. Let’s do it… I’m here every step of the way!
Candace
