Are you entering the home buying market, but have heard horror stories about multiple offer situations in the Twin Cities? In this article, I will share 6 tips on how to help your offer win in this wildly competitive market.
Its no secret that inventory is incredibly low on a national scale, which has caused compression and multiple buyers fighting for the same homes in their areas. This means that we are in an unbalanced, sellers market. You as a buyer will likely have to concede more during this type of market, and there are different ways to make your offer more competitive. In this situation, put yourself in the shoes of the seller. If YOU were selling your home, what would be important to you?
Tip #1: Write an offer with the least amount of "moving parts"
A seller will select an offer that is least likely to fall through, forcing them to go back on the open market. You can do this by limiting the number of contingencies in your offer. Contingencies can include the need to sell an existing home in order to purchase the home you are offering on or a home inspection.
Tip #2: increase the amount of earnest money
This shows the seller that you are confident and serious about your offer. An extra plus for a seller is to make this earnest money non-refundable.
Tip #3: write a letter to the sellers
Things to highlight would be specific features that you fell in love with, and how you see yourself living in the space. However, you do need to be careful when utilizing this strategy because several sellers will specifically request no letters. You will harm your offer by intentionally not following the rules laid out by the seller.
Tip #4: have a solid "team"
What I mean by this is to have your realtor not just send over your offer, but to actually pick up the phone and speak with the listing agent. You want your offer to be more than just an email, you want there to be an actual human behind it. You should also ask your lender to call the listing agent on your behalf, highlighting your strengths as a buyer.
Tip #5: Consider various offer clauses
- Appraisal gap guarantee
- Escalation clause
- Inspection clause (you dont always have to go right to waive the opportunity to have an inspection!)
An appraisal gap tends to be the strongest clause that you can add in your offer in this market, especially if you are bidding well over the asking price. This gap will guarantee the sellers will receive the actual amount you offered, even if the appraisal comes in lower.
Tip #6: work with a well-connected REALTOR
Relationships with other agents is one of the most important edge-ups for you because the listing agent will recognize and trust the agent working to get your offer to closing.
Now that you have these tips on how to win in multiple offer situations in the twin cities, you wont have to have a horror story of your own!
If you learned something during this blog, you will want to read my next post How to Avoid Overpaying for a House in a Sellers Market.