5 Tips for Making a Competitive Offer
Charlotte's real estate market has been on fire for many years. Its a matter of low inventory being in the market. Buyers searching to find their dream home can often times find themselves in a multiple offer situation. A multiple offer situation is when more than one buyer has put in an offer for the home and await the seller to make a decision on which offer they will accept.
When a seller reviews an offer they are looking to go with the offer that checks all or most of the boxes for them. Most of these decisions are based on the offer price as well as terms, timing and contingencies. In the Charlotte market you must be prepared for a multiple offer situation. Your offer must be strong anticipating there may be others out there that have fallen in love with the same home. So how can you make your offer stand out and put you in a better position to get your dream home?
Here are five tips to ensure you are the one the seller chooses:
Offer a Fair Price
When the market is moving quickly, this is not the time to throw out a low ball offer and hope they negotiate. Write an honest price based on market values. Your Realtor will be able to give you a comparative market analysis for homes that have recently sold in the neighborhood or nearby areas to help guide your decision on a fair priced offer.
Have a Pre-Approval
It may not be enough to simply offer a pre-qualification letter. When issuing a pre-approval a lender has verified your qualifications and an underwriter has given preliminary approval based on that actual home and a good appraisal. Signaling to the seller that the mortgage will most likely be approved and there wont be any funding hiccups during the due diligence period. If you are a cash buyer be sure to attach a bank letter/statement for proof of funds.
Be Flexible in Timing
Not everything comes down to price. A seller who is relocating might be more interested in an offer that gives them more time to move or one that can speed the transaction up. Make sure you get to know more about the seller so you can make a competitive offer. Make sure you have a great Realtor that can advise you on all the situations that can impact the transaction from the sellers point of view.
Present Attractive Terms
Most offers include contingencies for things such as appraisals, inspections, title and loan approval among others. Working with your realtor and lender, be sure to reduce any contingencies that are unnecessary. Doing this provides more confidence in your offer than others.
Consider Increasing the Due Diligence Fee
Sellers want to know they are working with serious buyers. In Carolina markets the due diligence and earnest money deposit is usually between 1% and 3% of the home value. If you have budgeted to make a 2% earnest money and due diligence deposit, consider increasing it slightly. If you know that your funding is secure with a pre-approval, increase the due-diligence fee, which is the non-refundable fee paid to the seller but credited to the buyer at closing. This action will signal to the seller that you are very secure in purchasing the home by taking the risk of an increased non-refundable fee if you are not able to close. Speak with your Realtor to know what your best options are to make sure your strategy can win you the home and stay with in your budget.
The most important thing in a competitive real estate market is being prepared. Working with your lender and Realtor, you will understand your options and be prepared to write a solid offer quickly, putting you in the best position to have your offer accepted. If you do not have a Realtor, please call me I would love to walk you through the steps of making a competitive offer.