5 Strategies To Make a Winning Offer on Your Dream Home
In today’s competitive market, the average home receives roughly four offers to purchase, according to the National Association of Realtors’ Confidence Index Survey.
But even though multiple offers are the new normal, it doesn’t mean you can’t snag your dream home. With the right preparation and guidance, you can make a winning offer that sellers will find hard to refuse.
Here are five key strategies to help you navigate a multiple-offer situation and come out on top:
1) Know Your Numbers
It’s important to know how much home you can afford before making an offer. And one of the best ways to narrow down your budget is to get a mortgage pre-approval from your lender. A pre-approval will show sellers that you’re a serious buyer who’s financially capable of purchasing a home. Once you know how much you can afford, factor in closing costs and monthly bills, set aside a rainy-day fund for unforeseen expenses, and leave a little wiggle room in your budget. That way, you can submit an offer with confidence and above the asking price if necessary.
2) Hire a Strong Real Estate Agent
It’s important to have a reliable and trustworthy real estate agent on your side throughout the home buying process, from searching for homes that fit your budget and needs to negotiating with the seller on your behalf. A strong real estate agent can also offer sound advice on what to bid for the home. They’ll have a pulse on the local market and potentially find out what other offers are on the table. More importantly, a great agent can assist you in negotiating a counteroffer without having things go sour, so you can emerge victorious and get the home you want.
3) Make Your Best Offer Upfront
In a market where multiple buyers are vying for the same property, you’ll probably have to go above the asking price to make a winning offer. But how much higher should you go? That’s where your real estate agent can be extremely helpful. Request that they ask the seller’s agent, “What will it take to win the home?” From there, you can decide on how much you’re willing to spend. Also, consider increasing your down payment, shooting for a short window to close, and being flexible with contingencies. While some sellers are looking for the highest bid, others might be more interested in a buyer who can close quickly or is willing to forego certain contingencies.
4) Write a Personal Letter to the Seller
“Buyer love letters” have become so widespread that even Etsy has begun selling templates for them. And while there are no significant data that they’ve played a deciding role in multiple-offer situations, some agents believe that personal letters help in swaying the seller’s decision. But before you send one, consult with the seller’s agent to ensure that this is acceptable and that you aren’t breaking any Fair Housing Laws. In other words, avoid mentioning anything related to race, religion, national origin, gender, familial status, or disability. Focus, instead, on what you liked about the home and what it would mean for you to own it. If you’re a first-time buyer, you might express your excitement about finally owning a home of your own.
5) Keep Your Emotions in Check
When you find the home of your dreams, it’s all too easy to get emotionally attached and make an ill-informed decision. You might view an aggressive counteroffer as a personal attack or feel like you’re being taken advantage of. But remember that a multiple-offer situation is just business and nothing personal. Don’t let it discourage you. Keep your cool and act professionally. Consult with your real estate agent, consider your options, revise your offer strategy if need be, and make a decision based on what’s best for you and your budget.
5) Be Prepared to Walk Away
There comes a time in a bidding war where you may need to lay down your weapons, so to speak. Some buyers won’t, however, and will offer more than they can realistically afford to spend, risking financial strain as a result. On the other hand, the seller might agree to a purchase contract so long as you increase your offer by another few grand. If this is the case, you need to be prepared to walk away from the negotiation table and train your sights on a different property. It’s not worth risking your financial well-being. The right home always comes along eventually. It might not be this one, but that’s okay.
The Bottom Line
Some buyers are put off by the thought of multiple offers that they quit their home search altogether. Others choose homes that they don’t 100% love to avoid the stress of a bidding war.
But with the right preparation and mindset, you can be the winner in a multiple-offer situation for your dream home. Just remember to stick to your numbers, stay cool throughout the process, and work with a real estate agent who keeps your best interests at heart.
For more information, reach out to an Elegran advisor today.
