After spring break each year, the slumbering real estate market wakes from its long winter nap and comes alive with new listings. Yes, there are typically more homes to choose from in late spring and early summer, but there are many more buyers, too.
The competitive real estate market of April, May and June can be frustrating to some prospective buyers. It’s not unusual to make offers that do not get accepted before finally securing a contract on a home.
But there are ways to avoid this. If you take the right steps beforehand, you can make an offer on a home you love with high confidence that your offer will be selected. Here’s a look at five things to do in order to make a competitive offer.
1. Get Your Financing in Order
Without financing, it’s nearly impossible to make a winning offer on a home. Take time to speak with several different lenders, learning about their processes, loan options and the current rates they’re offering.
Having a prequalification letter can be helpful for establishing the price range you should be shopping in. However, when submitting offers, providing a pre-approval letter from your lender will give the seller confidence that your credit and income has been verified and that you will be able to close on the home.
2. Know What You Want
During competitive periods in the real estate market, you don’t have time to conduct an in-depth analysis of a home before making an offer. If you wait too long, that home could disappear from the market before you’ve completed your research.
So make sure you know exactly what you’re looking for ahead of time by answering questions like:
•How many bedrooms and bathrooms do you need?
•What range of square footage do you find acceptable?
•What schools do you want your home to feed into?
•How close do you need to be to work, school, church, etc.?
•What price range can you afford?
These are important questions to ask before you begin your home search. If you come up with answers beforehand, you can make home-by-home decisions much more quickly.
3. Monitor the Market
Always keep an eye on the market. If you know the neighborhood you want to buy in, cruise the streets regularly in search of “Coming Soon” and “For Sale By Owner” signs. These properties are likely not in the MLS yet, and you may be able to make a winning offer before they hit the open market.
Your real estate agent can also create email alerts based on your search criteria. Have your agent set the parameters you want, and you’ll get a message any time a property that meets them comes on the market.
4. Understand Value
It’s OK to make an offer over the asking price for a home. In fact, making an offer over the asking price is one of the best ways to win in a competitive environment.
Of course, you don’t want to make an offer over the asking price if the home is worth less than asking. That’s why it’s so important to understand value. An understanding of value allows you to make offers with confidence, knowing full well what you’re getting for your money.
This is one reason why it’s good to have a quality real estate agent who’s experienced in the area. It’s hard for a homebuyer to fully understand the market when he or she only searches for a new home every few years. A real estate agent lives and breathes the market day in and day out, and that agent can help you identify value when it’s available.
5. Make it Personal
When making an offer, write a personal note to the current homeowner. Tell them about yourself (and your family). Tell them why you want to live in their neighborhood and in their home, and don’t be afraid to include pictures. There’s no guarantee that this personal touch will make a difference. But it might. And you should do everything you can to secure the home you want during the most competitive time of year.
Are you just starting to look for a home? I’m always here to help prospective buyers, no matter where they are in the process of searching. If you could use help in preparing to make a competitive offer, email me at pthessen1@gmail.com.
-by Perry Thessen
