Now that the Southern California real estate market has bottomed out and cycled back into a seller’s market, home buyers need to adjust their expectations. Housing inventory has shrunk dramatically since last year and sellers have plenty of offers to chose from. That doesn’t mean buyers should hesitate to buy a home, but they must be prepared for a battle of the bidders. Here are 6 ways to help your offer stand out from the rest.
1. Do Your Research
Take the time before starting your hunt to line up your finances, decide on the neighborhoods you are interested in, outline what you want and don’t want in your new home, and what concessions you are willing to make. Be prepared to make an offer as soon as you see the house you want. If you don’t, someone else will.
2. Get Preapproved
One important way to improve your chances of winning the bidding wars is to submit a preapproval letter alongside your offer. It shows the seller that not only are you committed to buying, but that you already have a lender who has verified your financial ability to do so. This will make your offer more attractive than one with a higher bid that comes with no guarantee.
3. Hire a Proactive Agent
Make sure to hire a real estate agent that is assertive and proactive. Contact your local First Team office and ask for a recommendation for the best buyer-agents they have. A good agent often makes the difference between an accepted offer and one that comes in too late.They also have access to the most recent houses on the market and can get you in before the rest of the bidders catch wind. In fact, First Team agents have exclusive access to Sneak Preview℠, a proprietary technology that has a database of homes for sale not available to the rest of marketplace, a definite plus for any buyer.
4. Give a Competitive Offer
Aside from speed, you also need to be thorough and fair. Do not try to lowball the seller or ask for special concessions as you would in a buyer’s market. Someone else will bid the asking price or higher without asking for anything from the seller. Be sure to give a competitive offer.
5. Include an Escalation Clause
In a seller’s market, you don’t have much negotiating power so it’s best to figure out the most you are willing to spend on buying a home and offer that. But, a bargain hunter is not completely without options. Talk to your agent about including an “escalation clause” in your offer. It will outbid any other offer up to an amount you decide on. Make sure the clause also requires the seller to present a copy of the next highest offer they receive.
6. Write an Emotionally Compelling Offer Letter
As you are writing your offer letter, think of it as writing a cover letter for a dream job or a love letter. This is your opportunity to make a good, lasting impression and get a call back. Make sure it is friendly, complete, and error free. Don’t be afraid to personalize it! Tell the seller why you love their house and it's the one you want to make your home. Sellers right now are receiving multiple offers; sometimes an emotionally compelling love letter can make the difference.
