How to Beat the Competition: Real Estate Tricks for Success in a Hot Market
Remember These Other Tips:
Not all purchase offers are equal. Variables such as down payments, appraisals and pre-existing homes make all the difference. The best way to come out ahead in this environment is to give yourself as many options as possible. Here’s four more tips for getting on top of things in an overheated buy-sell market.
How to Maximize Your Chances
When you go to get that mortgage approved, expect to provide paperwork going back a full two years from today. Lenders might want to see an accounting of your checking and savings accounts and possibly an explanation of any large deposits. They will also ask about the relationships of all the people listed on your loan application with you in maker to verify whether these are "arms length transactions" or "related party transactions."
Tips To Get On Top!
1. Get Pre-Approved for a Mortgage
Getting pre-approved can make all the difference in a seller’s eyes. Your local mortgage lender will give you a letter on his letterhead stating the maximum amount you can borrow under today’s interest rates, provided your income and credit history remain constant.
MAXIMIZE YOUR CHANCRES: Don't just get pre-qualified--get pre-approved, I mean go through the process that people used to think they'd go through at their bank, who pull your actual credit report and make an actual offer of credit -- not an informal report, not some conversation that never reaches the point of legal obligation, something close to a commitment from them in writing.2. Work with a Local Real Estate Agent
This is a facet of the market that takes considerable time to learn. You may see a deal break down or lose one without explanation. There are all sorts of nuances that only a person trained and experienced in real estate can pick up on, like the way some homes fly off the market while others say put for weeks.
How to Perform to Get the Best Results:
Find an agent who specializes in the area of town that best suits your needs. Look for someone who has shown success in competitive marketplaces, is able to respond quickly to new listings and offers. By front-loading all research concerns onto your real estate agent, he or she will almost always give you a competitive advantage over other buyers.
3. Be Ready to Act Quickly
In a hot market, time really is money. Properties often receive multiple offers soon after they go on the market, so you need to be prepared to act fast. This means having your financial arrangements in order, and it also requires that you know exactly what kind of property you are looking for. The faster your response, the more you increase your chance of success.
How to Get the Best Results:
Establish alerts for new listings that match your criteria and arrange to see properties promptly instead of waiting for them to become widespread. If you are cash rich but time poor, consider making a strong offer without delay. Sometimes slightly higher prices than those asked can be the key to getting what you want in a seller’s market.
4. Consider Waiving Some of Your Contingencies
Waiving contingencies is not without risk, but it can make your offer more appealing to sellers in a competition-stricken market. This is suitable for common contingencies like financing, appraisal, and inspection. By waiving one or more of these, you are essentially saying to the seller, I am willing take on more risk to get this deal done quickly.
How to Get the Best Results:
Before you waive contingencies,you may want to secure information on their dangers. If after careful evaluation you are confident in the property’s condition and believe you can obtain financing,waiving contingencies may be necessary for winning a bidding battle. Nevertheless, it’s important to consult your real estate agent and maybe even a lawyer before coming to a decision.
5. Write Your Own Personal Offer
Where multiple offers are the norm, adding a personal touch to your offer can make all the difference. This is especially true if you write a personal letter that tells them why you love their house and how you see living there is going to be. Little gestures like this can set off some emotive spark with buyers from deep within their hearts where negotiation hasn't worked yet.
How to Maximize:
Keep your letter brief, sincere, and focused on the aspects of the property that you appreciate most. Also, suppose you and the Seller have anything in common (for example, you are in the same stage of life or appreciate certain features that their home happens to include). While not every seller will respond to an emotional appeal, this tactic has been known to pay off in other cases- especially if it’s a highly competitive situation.
6. Be Flexible on Closing Dates
Sellers in a hot market may have specific needs for closing dates. Be flexible and work with their timeline, and you could make your offer more attractive. Whether they need an expeditious close or extra time to move out, your efforts to coordinate schedules will put you ahead of other buyers.
How to Maximize:
Ask your real estate agent to discover when the seller would like his or her perfect closing date to fall, and try to match it upfront wherever possible. If you can, offer a ‘rent back’ agreement wherein the seller stays in the property for some period after completion. This can be a situation beneficial for both sides.
7. More on Offer a Larger Earnest Money Deposit
That earnest money deposit shows sellers you do have some interest in taking over and buying their property. In a competitive market, however,it is often wise to offer a greater earnest money deposit than customary.This can demonstrate that you are really serious about purchasing the home, and thus your bid has a better chance of being accepted. This deposit is usually applied to your down payment or closing costs, so you are being serious at no extra cost.
How to Maximize:
Discuss with your real estate agent what a competitive earnest money deposit might look like in your market. In some cases, offering a payment of 2 to 3 percent the purchase price may cut you off from other buyers, but make certain funds are available promptly and you have resolved on going ahead with buying this property.
Conclusion
In a superheated real estate market, one needs to study the patterns, act promptly and be prepared to take risks. Follow these tips, and you will more probably succeed in taking the house you want even in today 's most competitive markets. To win in a hot market, don't forget this simple truth: be prepared, but act fast.And work closely with a real estate agent who understands the marketplace really well and can help guide you through it.
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