07 Jul How to Out-Bid Others for Your Dream Home
Across the country, many housing markets are white hot. Limited inventory and rapidly rising prices are instigating bidding wars for the few great properties that are listed on the market. These battles, often fought by multiple bidding parties, are leaving many would-be home buyers in the dust time and time again.
Under such intense circumstances, it is up to the home buyer to be as prepared as possible to make the right bid and to make it fast. Contrary to popular belief, it’s not always offers with the highest amount of money on the table that get accepted. Here are a few tips to edging out home buying competition.
One way to really grab the attention of the home seller, and to get them to take your bid seriously, is to offer cold hard cash. If you are able to afford it, an all-cash sale is extremely attractive to home sellers as it reduces the headache that comes along with the arduous process of securing a mortgage. While mortgage applicants sometimes have to wait weeks to be approved, an all-cash buyer is already qualified and ready to make the transaction.
All-cash sales have become extremely common in the last year or so, representing more than 40 percent of recent sales. In some cases, sellers have even been known to accept a lower offer if it is made with an all-cash provision.
Pre-Underwrite Your Mortgage
While most of us might not have the large lump sums required to buy a home just laying around, facilitating the mortgage process by getting all of your paperwork in order and getting pre-approved and pre-underwritten for a loan is also an extremely attractive measure for a home seller. With pre-underwriting, lenders go through the pre-approval process and then take it one step further by reviewing all of the income and asset documentation required to approve the mortgage.
In these cases, sellers don’t have to worry that a buyer’s mortgage application will be rejected and all that needs to be completed after the contract is signed is the appraisal.
Keep Contingencies in Line
According to John Walsh, president of Connecticut-based lender Total Mortgage, being a serious buyer looking for a smooth transaction is about the best thing a seller could home for. “What sellers really don’t want to do is waste time,” he says.
Let a seller know that you are a serious by keeping anything that could cause the sale to fall through, like contingencies, to a minimum. Waive any fickle contingencies, but hold on to some that protect you as a buyer such as the home inspection. This way if there is something that will be costly to fix, you won’t be stuck with a bigger commitment that you can’t back out of.
Get Your Offer in First
The old saying, “the early bird gets the worm” totally applies to this situation. If your dream home is listed, be the first one to see it and the first one to wow the buyer with a seamless sale.