Buying a House when Competing with Multiple Offers
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Many of my last few posts have been about what a strong seller's market we have right now in the Salt Lake area. And it really is a great time to sell your home. While that can make buying a home a little trickier, it can still be done. What do you do when there are many good buyers competing for the same great house - when there aren't enough houses to go around? I've got some tips for you and, if followed, they will make home buying in a seller's market more successful for you.
1. Do Your Financing Homework
I've written before about the importance of being pre-approved for a loan before you start looking for a home. In a seller's market this is even more important. When sellers have 2 or 3 or more offers in front of them, a pre-approval letter will tell them that you have done your homework and that you are capable of closing on the house. If the other offers don't have letters you will edge ahead of them. If they have letters and you don't, your offer may fall lower in the list.
2. Educate Yourself on the Market
It's important to understand what houses are worth and selling for in the neighborhood(s) you are searching. The more houses you tour the more you will learn. That is why it's important to get out and look at houses with your agent. It will educate you so when you find a home that you love and meets your criteria you will know whether or not it's priced well for it's condition. You'll be able to make a quick, educated decision so you don't over or under offer for the house. Of course, your agent will know this info too and can help you learn and make decisions when it's time.
3. Make Smart Offers
In a seller's market it's less likely that you will get a home for much less than the asking price. Good homes that are priced well will often sell quickly at or above the asking price. It's the nature of a seller's market. Keep that in mind when you find the house you want to buy. This is where your knowledge of the homes in the area and your agent will be invaluable. You and your agent will know if the house you are loving is worth what the seller is asking. If it is and you want a fighting chance of buying it, don't "low ball" the seller. A seller's market is not the time for writing offers on well-priced houses way under asking price - especially when there are multiple offers. Write your best offer.
4. Work Separate from Your Emotions
When deciding how much to offer the seller try to divorce your emotions from the situation. I know this is much easier said than done. This house has the potential to become your next home, the place you will create new memories with your friends and family - of course your emotions are involved. In the negotiating process, however, it's best if you can separate yourself from that. To see the price and other aspects of the contract objectively will keep you from spending more for the house than you can afford or should pay. Your agent can help with this immensely. Your agent is a neutral party that works for you and can help you see things without rose colored glasses.
5. Write the Seller a Letter
All that being said, a bit of emotion can help to set your offer apart from others. Many sellers also have emotional connections to their homes. They have lived there and created their own memories. They want to know that their home will continue to be loved after they are gone. A simple heartfelt letter from you could help to alleviate some of their fears and separate you from the other buyers.
6. Follow the Above Steps While and at the Same Time Remember the Laws of the Universe.
One of my life philosophies is that you work hard and do your part and what is meant to be will be. Follow the above guidelines and if that house is supposed to be yours it will work out. If you've done everything right and you don't get the house it just means that there is a better house out there waiting for you. I feel a little silly saying it, but I do completely believe it. I've seen it happen time and time again. One of the best parts of my job is seeing my clients find their perfect new house.
Give me a call and we'll start looking for your next home!
