Winning A Home Sale When Competing Against Multiple Offers
If you love board games like I do, then you know how important strategy can be in order to win. The board game my family has been playing non-stop during the last year is a competitive game called Catan. The key to Catan is to build houses and earn points, but in order to build a house, you need to acquire certain materials. Sometimes life is a little like Catan; except instead of wheat, stone, and iron, you need time, flexibility, and a little cash. Let’s take a look at a couple strategy ideas to help you win the keys to your new home.
Strategy One: A Clean Offer
The first and perhaps most important step when competing against multiple offers is writing a “clean” offer. Clean offers include: an offer at or above the listing price, some upfront earnest money, a willingness to forego the inspection and cover the closing costs, contingencies in favor of the seller, and the ability to accommodate a flexible closing date.
I know. You’re probably wondering what you get in return. A house. You get a house.
First start with a good lender to help you write a clean offer. Lenders who know the area and local agents offer advantages over generic sites you might find online or small bank lenders who might not write many purchase offers. Your real estate agent can offer suggestions about who to use or you can check out this site for more tips on choosing the right lender: https://www.nerdwallet.com/best/mortgages/tips-for-finding-best-mortgage-lender.
A good second step in writing a clean offer is cash. Make an offer above the list price. This might mean you have to look at homes priced below the amount you’ve been preapproved for or the amount you’ve saved for your home. Leaving yourself some breathing room may give you the flexibility you need to raise the cash to cover closing costs, appraisal clauses, and other expenses that will make your offer appealing to a seller.
Lastly, plan for a flexible move date. A flexible closing date may be the difference the seller needs that pushes your offer above the others. Flexible closing dates may save the seller expensive moving costs, storage costs, and inconvenient hotel stays when trying to coordinate a move.
Strategy Two: Advanced Preparation
Before a game of Catan starts, the board must be set with roads, quarries, and fields. Your set up to home buying includes actions you take well before your home search starts, like avoiding debt, boosting your credit score, and understanding the market.
When you are considering a home purchase, you might want to delay other big-ticket purchases. Hopefully that new car, deck furniture, or new phone can wait. Avoiding debt is not only good common sense; it can give you the leverage you need for your home purchase.
In conjunction with avoiding debt, working to boost your credit score will help the home buying process. Credit scores have a wide range—from 300 to 800—and you may be inadvertently lowering your score. For more information on credit scores and home buying, check out this great article: https://www.cnbc.com/2021/05/27/heres-how-to-boost-your-credit-score-and-get-a-low-mortgage-rate.html, or talk to your lender or your real estate agent (the Enclave Team has some of the best in the biz!). Knowing where you stand financially against other buyers and making the little changes in lifestyle will have you in the 700s before you know it.
Avoiding debt and boosting your credit may make you eligible for a conventional loan as opposed to FHA loans. Although FHA loans are a trustworthy option, they make some sellers nervous, so a conventional loan makes you a more appealing buyer.
Lastly, and it pains me to say this, but prepare to lose sometimes. Even if you don’t win the first time, there will be other opportunities. Look and consider houses that have been on the market a little longer than others, especially if you’re a first-time homebuyer. Homes that have been listed for longer, probably haven’t received as many offers as the homes that sell quickly.
During a seller’s market or in the challenging housing market we are experiencing; winning the bid on a house can often feel hopeless. Don’t lose hope! Strategic, thoughtful steps will walk you right to the front door of your new home, and you can get back to family nights of Catan.