Today’s real estate market has high buyer interest and low housing inventory. With so many buyers competing for a limited number of homes, it’s more important than ever to know the ins and outs of making a confident and competitive offer. Here are five keys to success for this important stage in the homebuying process.
A recent article from Freddie Mac offers guidance on making an offer on a home in today’s market. Right off the bat, it points out how emotional this can be for buyers and why trusted professionals can help you stay focused on the most important things:
“Remember to let your homebuying team guide you on your journey, not your emotions. Their support and expertise will keep you from compromising on your must-haves and future financial stability.”
Your real estate professional should be your primary source for answers to the questions you have when you’re ready to make an offer.
Having a complete understanding of your budget and how much house you can afford is essential. The best way to know this is to reach out to your lender to get pre-approved for a loan early in the homebuying process. Only 44% of today’s prospective homebuyers are planning to apply for pre-approval, so be sure to take this step so you stand out from the crowd. It shows sellers you’re a serious, qualified buyer and can give you a competitive edge if you enter a bidding war.
According to the Realtors Confidence Index, published monthly by the National Association of Realtors (NAR), the average property being sold today is receiving more than three offers and is only on the market for a few weeks. These are both results of today’s competitive market, showing how important it is to stay agile and vigilant in your search. As soon as you find the right home for your needs, be prepared to work with your agent to submit an offer as quickly as possible.
It’s only natural to want the best deal you can get on a home. However, Freddie Mac also warns that submitting an offer that’s too low can lead sellers to doubt how serious you are as a buyer. Don’t submit an offer that will be tossed out as soon as it’s received. The expertise your agent brings to this part of the process will help you stay competitive:
“Your agent will work with you to make an informed offer based on the market value of the home, the condition of the home and recent home sale prices in the area.”
After submitting an offer, the seller may accept it, reject it, or counter it with their own changes. In a competitive market, it’s important to stay nimble throughout the negotiation process. Your position can be strengthened with an offer that includes flexible move-in dates, a higher price, or minimal contingencies (conditions you set that the seller must meet for the purchase to be finalized). There are, however, certain contingencies you don’t want to forego. Freddie Mac explains:
“Resist the temptation to waive the inspection contingency, especially in a hot market or if the home is being sold ‘as-is’, which means the seller won’t pay for repairs. Without an inspection contingency, you could be stuck with a contract on a house you can’t afford to fix.”
Today’s competitive market makes it more important than ever to make a strong offer on a home, and a trusted expert can help you rise to the top along the way.
Live the luxury island life
With Hurricane Irma’s first anniversary looming, we can’t help ourselves but to remember the devastation Ocean Reef and the Florida Keys experienced with Irma’s impact on September 10th. Irma was the fifth-costliest tropical cyclone on record at $64.76 billion. Those with adequate insurance coverage for their damages were truly blessed.
Recently, we were lucky enough to meet with Meg Dieppa and Cheryl Lyons of MARSH here at Watson Luxury Properties to freshen up on our insurance IQ. Apparently, we can’t navigate the world of insurance without professional help, and we aren’t afraid to admit it! We do notice that many home buyers here at Ocean Reef typically call up their insurance brokers in other states to add their new piece of paradise to their existing policy or bundle. Which we always thought to be very efficient. However, I’m sure you knew this already, Florida is a wacky state (in more ways than just insurance), which is why we now recommend to our clients to give MARSH a call and request a free review of all your policies from this state’s experts. Plus, MARSH, now recognized as the largest broker in the world, is also a member of our Ocean Reef Chamber of Commerce!
The most noteworthy information we got out of the whole meeting, was that they are salaried employees. Yes, that’s right, the policies they write for you are not commissioned. So you can trust that they are truly in this to help you (there isn't just dollar signs in their eyes). They love what they do, and they are darn good at fitting all the puzzle pieces together.
Other Links:
Email Meg Dieppa here.Email Cheryl Lyons here.Check out their Brochure here.
Forbes: Hurricane Insurance: Is It Important? Why Do You Need It?
WSJ: As Hurricane Season Arrives, U.S. Homeowners Haven’t Fixed Their Big Underinsurance Problem