Are you a frustrated buyer in this market?
Multiple offers, escalation clauses, large down payments, cash offers, increased down for low appraisal addendum, pre-inspection, etc. These terms are rarely spoken by anyone outside of the real estate world and if you are a buyer in this market you're likely sick and tired of hearing them! Do not worry, you're not alone.
Are you finding that what you could have afforded, as little as a few months ago, is now outside of your reach financially? Do you feel like you're being forced to compete on homes that don't inspire you and perhaps you may not even want the house? Are you harboring resentment towards a co-borrower for past decisions that prevented you from getting a home you had offered on? Again, you are not alone!
Why is the market so in favor of sellers? The answer is complex but simple. It's supply and demand. There are just not enough houses available for suitable buyers and with the millennials reaching peak buying age, coupled with low-interest rates, there are far more buyers than sellers. Add to that, the fact that it is still, in many cases, cheaper for a person to pay a mortgage than pay for rent and you have a seller's market which results in increased housing prices.
So what can you do to compete successfully? First, you need to be realistic with yourself and your home buying search. Do not become emotionally attached and fall in love with a listing before your offer has even been accepted. Understand you may lose out on some offers you make because you are competing against a lot of other buyers and some may be more qualified, have more money, or are taking more risk.
Second, you need to be able to put your best offer forward. An offer that is well-written, complete, and one that can minimize your weakness as a buyer and highlight your strengths. If you can't afford a higher down payment maybe you can make yourself more attractive to a seller in other areas that don't require more $ but reduces risk the sellers risks.
Third and perhaps most importantly choose a real estate professional that understands the market, knows how to negotiate, and can get things done! Most people know several real estate agents. Don't fall into the trap of feeling like you need to use Agent XYZ because they are a friend of a friend of the family. Agent XYZ should only be used by you if he/she is the best agent to work for you and get the job done!
I have represented many buyers and sellers in this market so I see it from both sides. Trust me, buyers, it is a nice market for the sellers but, it comes with its own set of challenges for sellers. Believe it or not, many sellers do not accept the highest-priced offer, instead opting for the "strongest" all-around offer. It may help you as a buyer to put yourself in the sellers' shoes when designing your offer and hopefully, your agent is able to help you with that process! Check out my blog article for Sellers in this market to see the advice and scenarios I layout there. This will help you understand this market from a seller's perspective and provide you with some valuable insight.
If you need help, feel free to give me a call or send me a message. I am an open book and would love to help you navigate this difficult market and create a strategy for you to win!