Hot Housing Markets Are Tough to Navigate for Would-be Homebuyers. Adopting a Few Winning Buying Techniques Will Land You the Perfect Deal.
Up and down the California coast, the most sought-after real estate markets are seeing similar buying conditions—low inventory, high demand, and rising prices.
In other words, a hot seller's market.
While not always ideal for property seekers, savvy buyers can thrive in such markets. Let's explore five competitive buying techniques that will help you stand above an increasingly crowded marketplace and secure a home.
Acquire Pre-approval
With pre-approval for your home loan, whatever offer you make, as long as it's competitive, will jump ahead of all others not backed by a lender. Not to be confused with pre-qualification, which estimates what you can afford, pre-approval is a green light to buy. It shows you're a serious homebuyer who has taken the additional steps to seek out a loan and have a lender sign off on your financial standing to purchase a home.
In many multiple-offer scenarios, a seller will often toss aside bids that don't come from pre-approved buyers.
Have Cash? Use it.
The only position better than having a preapproved mortgage is not requiring a mortgage in the first place. If you have the means, a reasonable cash-only offer will ensure your bid is one of the most viable, even if it's not the most lucrative. Cash cuts through the minutiae of homebuying - there's no approval process, no underwriting, and practically no waiting period.
Cash is particularly handsome to sellers on homes where the seller is looking to move their home as quickly as possible.
Avoid Contingencies
Speaking of time, even in the most competitive markets, sellers are often themselves on the clock to get a deal done. Whether it's to avoid carrying two mortgages, wanting to complete a relocation, or being ready to get on with their lives, sellers appreciate offers that keep the transaction process moving forward. Contingencies run counter to swift deal-making and will often put you at a disadvantage in multiple-offer scenarios.
To avoid littering your offer with conditions, be willing to cover certain scenarios such as low appraisals. You may also assume a certain level of risk by foregoing an inspection and accepting the property as-is. Just be sure you're comfortable doing so.
Make a Personal Appeal
If writing a personal appeal to the seller about why you're the ideal buyer sounds a bit old-fashioned, it's because it is. It's also why your offer, with a personal letter in tow, will stand out among all others, especially if it comes with pre-approval and without contingencies.
Even with an old school letter, adopt modern-day communication techniques - keep your note short and to the point, and don't steer away from your goal of securing the home. Explain why the home and community appeal to you and why you'd be a great steward for the property's future.
Start with a Strong Initial Offer
The most basic tenet of home negotiations is that the most serious offers are the ones a seller considers first. Whatever the reason that makes a particular home popular - location, specific neighborhood or schools, layout, and design - always assume that a competing buyer desires the property just as much as you do. Top bids - those at or near asking, even a bit above if the market dictates - are entertained first. Work closely with a trusted real estate professional to put together a solid first set of numbers to indicate you're serious about making a deal.
Again, pre-approval, a cash-only offer, tossing aside contingencies, and a personal appeal all help solidify your position—but money talks, and a great initial offer speaks loudest.
Ready to sell your current home? In the market to buy?
Contact The Palacios Group today and let us be your guide to South County or coastal L.A. Whether it's investment property in San Jose, Palo Alto luxury homes, or a Santa Monica beach house for sale, we'll ensure you achieve your real estate goals.
