Gone are the days of the recession (thankfully!)...unless you’re now trying to buy a home. Being a real estate agent for 10 years, I’ve experienced several buying cycles. When representing buyers, it was actually nice when it was a buyer’s market (between 2008 and 2010), mainly because buyers didn’t have to try as hard to get under contract. While we had to deal with lots of 6 to 10 month short sales, buyers could be a little pickier with their wants, and could even receive closing credits from the sellers.
Well, those days are long gone. In Hawaii, it has been a seller’s market for at least the past 4 years, and because of our low inventory, the trend is continuing with no end in sight. Knowing this, some buyers have sadly thrown in the towel and decided to keep renting. Guess this is ok for those who want to fund their landlord’s mortgage and don’t care about building wealth for their future. Maybe those folks will gamble their money in the stock market instead...and to those, I say good luck.
But what happens when you suddenly get the notice to vacate because your landlord decides to sell? Or what if you’re just tired of throwing your hard-earned money down the drain in rent? I say buy now rather than later when prices are even higher!
Not All Offers Are Alike
For most sellers, besides their obvious bottom line net profits, they will focus on the type of financing their potential buyers will be obtaining. If you’re not fortunate enough to have cash lying around to purchase that property, you will need to get a loan. Most sellers are advised by their agent to accept the offer that has the strongest financing...meaning the biggest down payment. On the opposite end and actually if you’re lucky enough to qualify for 100% financing, you should be aware that it may not be the most popular financing for sellers to choose.
How Do You Stand Out?
Ok, so if you’re using a Government USDA loan in rural areas, or are a military member that can use their VA privileges, your offer needs to shine. That’s when working with an experienced Realtor comes in the picture. There are certain techniques that can be utilized to get your offer accepted, and I’ll share a few tips here...
Present a Clean Offer
Sounds simple, but I’ve seen it work firsthand. Don’t ask for a bunch of things that will make the seller do extra work or cost the sellers more of their profit. Instead, offer to pay for some customary seller fees and your offer will get noticed. While some agents are too lazy or busy to write a cover letter, this has been the tipping point in my buyer’s favor countless times. Yes, many sellers only focus on having the biggest net profit; however, other sellers care about who will buy their home and love it as they have. I’ve had a VA buyer selected over a cash buyer because of their “story,” so keep the faith!
You May Need To Be Willing to Pay Over Market Value
In this market of multiple offers and high competition, a clean offer and good cover letter may not suffice. Many sellers are listing their homes for over the market comparables because of the plethora of buyers. So many buyers are willing to pay the delta between the sales price and the appraised value. This is a personal and financial decision that only you will be able to make depending on your situation and goals, so assess how much you like that house and how sad (or not) you will be if your offer doesn’t get selected. Make your offer price the highest and best it can be if you love the home and don’t want to lose it over $1,000 or $5,000 because you will likely not get a second chance to rebid.