- Home inventory continues to be low, making it a tricky market for home shoppers who have a specific location in mind
- By preparing financially and making the right adjustments, buyers can compete and win in multiple offers
- While it does help to have the highest offer, there are other ways to stand out from competing buyers to win your dream home
If you’ve studied Economics 101, then you know that as the supply of a good falls, the demand of that good rises. And that’s exactly what’s happening with the housing market in our 13-county metro area.
In February, the market saw a 25 percent decrease in available inventory due to higher buyer demand. The result? Prices are rising and those shopping for homes may find themselves competing against other eager buyers.
Common wisdom says that the highest offer will win every time, but the reality of multiple offers is a bit more complex. Here are insights you can use if you enter multiple offers when buying a home this year.
Assess the market
Our market research shows that homes in the following areas have the tightest inventory right now:
- Mounds View
- Apple Valley
- St. Louis Park
- Spring Lake Park
- Columbia Heights
But no matter where you are buying, it’s important to talk with your REALTOR® about the market and inventory so you know what to expect. Real estate is all about location and local quality of life, so hiring a specialist who serves your desired area will be critical to making the right bid.
Go big to get home
While the highest bid isn’t the only consideration sellers make, you’re unlikely to get the sale if your offer is at the bottom of the heap. When making an initial offer on a home in high demand, your Realtor can help you submit an offer that is slightly above the average home value for the neighborhood.
Together, you can strategize on the benefits of offering your best offer out of the gate — meaning you would walk away if the home still hit multiple offers — or offering below your “ceiling” so you have leverage once other bids come in.
VIDEO: Multiple offer tips for buyers
Nix the contingencies
In a market where buyers have the advantage, contingencies are common. Buyers may make an offer that is contingent on the sale of their own home or based on a home passing inspection.
When sellers have the advantage of multiple offers to choose from, they are unlikely to look at offers that include such contingencies. Provided the home is free of major issues like a cracked foundation or a leaking roof, consider making a “clean offer.” This could be one way to appeal to a seller outside of having the best offer.
Put cash down and get pre-approved
Another way to impress sellers is to show that you have a substantial down payment, and that a lender has pre-approved you for a loan. Each of these steps display that you are a lower-risk buyer, and the seller and their agent may feel more comfortable with you than someone who hasn’t done their lending homework. We’ll work with your mortgage loan officer or your financial planner to ensure you’re making a strong but safe offer.
Offer better timing
One last way to stand out in multiple offers is to offer the seller a beneficial path to closing. If we know the homeowner is hoping to sell the home immediately, it would benefit you to offer a closing with a month or even a few weeks. If the seller is waiting on a new construction home that won’t be ready for 60 – 90 days, offer a delayed closing. When multiple bids are close, these types of generosities can make all the difference.
Ready to enter this hot market? We can discuss the frequency of multiple offers in your selected area, then determine your strategy for standing out no matter what your budget. Reach out today to get started.
For more insights you can use as you prepare to buy a home, follow #BuyerInsights on Twitter, Facebook, Instagram and YouTube.