Make your best offer first

Make Your Best Offer FIRST

The strategy we are talking about today is not about negotiating the best price but rather about beating your competition and buying the home. The reality is there is just not enough homes on the market and when competition gets tough different tactics are necessary. This may not dawn on you until you lose a few homes due to better offers.

According to the National Association of REALTORS®, sales in December were annualized at 6.76 million, a 22.2% increase year over year. The median sales price us up 12.9% from the previous year at $309,800. However, inventory for December fell to 1.9 months’ supply from 3.0 months’ supply in December 2019. A balanced market is a six-month inventory.

Tactics that work in a buyer’s market do not work in a seller’s market. The lower amount of inventory in homes for sale has led to shorter market times and multiple offer competition which has pushed up sales prices over listing prices. Buyers who are entering the market for the first time or are looking in mid-level price ranges, may have experienced losing out multiple times when trying to buy a home.

Buyers MUST be strategic to successfully buy a home. There are some items that are absolutely required just to be in the running.

You need to get pre-approved unless you are paying with cash and have adequate proof of funds. Financial advisors and I have been saying this for decades but now it is critical. Despite all the other reasons, the most important is to prove that the buyer is serious and has gone through the process to have a lender run their credit and verify income, expenses, employment, and credit.

For a new home on the market that is in a desired location and price range, you should already assume there will be multiple offers and that you may not even get a counteroffer from the seller. Make your best and highest offer first, like you won’t get a second chance. This can be difficult due to the bargaining nature of people.

Earnest money shows that the buyer is acting in good faith and often accompanies a contract. The customary amount might not be enough in a competitive market. Consider putting down two or three times what might be normal. Talk with me about what would make a good impression on the seller.

Be careful about contingencies. These protect your earnest money from specific concerns like loan approval and inspections, but the seller make decide these are ways that the buyer can get out of the contract forcing them to put the home back on the market. If multiple offers are presented, the seller may take the one with the least amount of contingencies, especially if the amount offered is comparable.

Contingencies usually have a time period connected to them that allow for inspections. Shortening these time periods as much as you can limits the time that the seller might feel they are in limbo.

Being flexible is also a plus, expressing a willingness to move the closing and/or possession dates to accommodate the seller’s schedule. This could be important and make the seller favor your contract, this can be done as a verbal statement from me to the listing agent.

The items I mentioned above are all things you should consider before making an offer. I would be happy to discuss all of these during the home buying process. I have enough experience to help you make your offer fast and help give you a step up against the competition. For more information, you can download my Buyers Guide.

I can provide Insider Information on Fairfax VA homes for sale. Get you a FREE Market Snapshot Report of Your Northern Virginia Home’s Value, or  Search All Northern Virginia Homes For Sale. Put that data you need at the tips of your fingers!

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