September 28, 2019
Buying a home during a seller’s real estate market might get a little frustrating, since competition may be stiff and it can easily feel like you have no negotiating power. While it may feel that way, there is plenty of action you can take to weigh things in your favor. You just need to know how to position your offer to purchase in a better light than the competitions offers.
Here are five specific actions you can take:
- Understand current market values: Seller agents will employ marketing techniques designed to get their client the highest possible price. An appraisal may limit a sales price, but you still don’t want to get drawn into offering more than you want to. While there are several online programs to instantly provide a ‘Market Price,’ these only consider general information and can be wildly inaccurate. A market analysis for the home you want to purchase, prior to submitting an offer, will give you the most current idea of market value. It also gives you negotiating power for any counteroffer.
- Pre-Approval versus Pre-Qualified: Aren’t they the same thing? No, they aren’t. One comes with a letter that tells a seller you are fully committed and ready to purchase. A pre-qualification only says you “look good” to the lender, but they still need to go through a fairly lengthy process before actually committing to a loan. It’s like having cash in hand, and strengthens your negotiating position considerably.
- Make a strong offer right out of the gate: No matter what stories you’ve heard of people making “low ball offers” and buying at the lower prices, those tactics seldom work in a seller’s market. There are usually more than one buyer interested in a home that is priced right and ready to be sold. You want to make your best offer that will entice the seller to say yes, and successfully compete with any contending offers.
- Let your Earnest Money speak, LOUDLY: when you are serious about purchasing a property, a serious Earnest Money amount tells a seller you aren’t fishing, you’re buying. In a multiple bid situation, a larger Earnest Money tendered with your offer can mean the difference between closing a sale and continuing to search.
- Knowledge is power: Knowing what the home seller needs beyond the house price can be as powerful a negotiating tool as a blank check. If you can offer them extra time to move or a super quick closing, information can work to your advantage, especially when you have competition for your dream home.
When you’re on the hunt for a home in Essex County, your local marketing specialist can make the challenge a lot less difficult. Knowledge of up to the minute market values and inventory availability puts you in the strongest negotiating position to buy your new home.
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