When the marketplace for a home gets competitive, you’re going to want to know how to get competitive back. The real estate market is growing nationwide but while the inventory increases so does the competition to acquire these newly-listed homes.
So, how do you fight against factors such as all-cash offers, offers that are over list-price and even the affordability of a home?
Let’s assume that you are going the route of financing and you’re ready to make an offer. Here is a list of four ways to increase your chances of getting the seller to say “YES!”
1. The Lender
Believe it or not, whoever is securing your loan can be a factor. If you find a lender with a good reputation (this means they are trusted, recognized and the agents like them), this will help get the seller’s agent on your side because the lender has influence on the seller.
2. The Buyer’s Agent
The real estate world is a networking world. They frequently work with each other on a regular basis so an agent with a good reputation is key. If you have a good and reputable agent working for you, they will be able to have greater influence over the seller’s agent. Trust is key in their relationship.
How do you find a reputable buyer’s agent? Ask friends or family members and check reviews online by other consumers. You’re looking for open-ended honesty and a proven track record.
Here’s how this dynamic works together. When the Buyer’s Agent submits your offer, the Lender can call the listing agent and rave about your qualifications.
Why does this matter? Listing Agents will get an offer and have to contact the loan officer in order to feel out the buyer’s qualifications. When the Lender calls the Listing Agent, it’s one less step that needs to be done and increases your chances of getting an accepted offer.
3. 20% is Still King
Believe it or not, 20% down looks better than almost any other approach. Although you can still get a house with just 3.5% down on an FHA Loan, the 20% down approach looks much better on paper and shows stronger financial strength.
4. No Credit for Closing Costs
Don’t request a credit for closing costs in your initial offer because the odds of the seller accepting your offer are significantly decreased. One of the ways around this is to propose a little higher offer in hopes that they go for it. This is risky though so be very cautious if you’re requesting a credit for closing costs.
5. Offer a Short Closing
Be aggressive and offer to close in less than 30 days. This tells the seller that everything is good to go on your end. Please note, this is a challenge so be ready.
As a homebuyer, you’ll have to provide any requested information in a much faster time. So whether it’s a bank statement or pay stub, have everything to your lender in less than 24 hours after the request.
It’s also worth checking out your credit reports and scores a little before you start looking. If you check a few months prior to home-buying, you’ll have time to fix any errors. This also gives you the advantage of promising that short closing time because it's one less surprise that could pop up.
With a little research and finding the right people, you’ll have the edge when it comes to buying your next home.