You’ve found the perfect home. What’s next? Make an offer. We are currently in a seller’s market. This means there is a higher demand than supply and sellers have the upper hand. Here are four tips to make your offer stand out.
1. Try to learn more about the seller
This one can sometimes be overlooked. It is always best to learn more about what the seller’s situation is. Does the seller want to move in 30 days, or are they looking for an extended closing? Why are the sellers selling? Are they downsizing? Moving to something larger? Separation? It’s best to tailor your offer to the seller’s needs when competing. You can’t do that unless you ask the right questions.
2. Deposit: Make it adequate
Nothing says confidence like a clean offer and an adequate deposit. A larger deposit shows the seller that you are serious. It’s best to increase as much as your budget and risk tolerance will allow. In Kingston’s past, an average standard deposit on a resale home was $1,000-$5,000 due upon acceptance. We are now seeing an average of $5,000-$15,000 when competing. The price of the home is a factor as well; more expensive homes require a larger deposit.
3. Price: Offer higher than asking price
Your offer price is, of course, one of the essential components of your offer. When competing with multiple offers, the likelihood of offers being over asking is very high. How high depends on the number of competing bids and the value of the property. This is where previous sales data becomes crucial for the particular area and home type. We like to believe the list price in these situations is irrelevant, and a buyer should pay what the home is worth and what they are comfortable with depending on their plan.
4. If possible, reduce or eliminate conditions
The majority of the time when competing, the offer with the least amount of conditions or the shortest timeframe for conditions usually wins. Sellers are often willing to leave money on the table if they know their home is sold that day instead of waiting and having the potential for something to go wrong. This can be scary for you as it comes with a risk on many levels depending on the situation. It’s best to chat with your mortgage professional before going forward with reducing or eliminating conditions. The same is valid for inspecting the property; you may not have the opportunity to have a home inspector or a well and septic professional visit the property before purchasing. It comes down to risk tolerance, experience, and capital.
Using these four tips can help you conquer the competitive market and ensure that the perfect home is yours. Trust your Realtor who will help guide you through making the best offer and define what is needed using the most up-to-date data, local knowledge, and confident negotiation skills.
