Your Dream Home Is Also Everyone Else’s
News flash: You’re not the only one eyeing that killer Central Phoenix home with the perfect kitchen and large backyard. You’re simply one of several others who have fallen head over heels in love with the same “dream home.” Awkward.
And unless you’re all going to live there together — which could get even more awkward — a bidding war could be on the horizon. In fact, Newsweek says that Phoenix is the fifth hottest real estate market in America.
Now to the good news. As a Homie buyer, you’ve got a secret weapon. With a refund of up to $5,000 that goes towards closing costs, you can buy more home for your money and use some of that extra doe to improve your offer. While that’s a great start, you’re going to need a few more tips and tricks if you want to make an offer a seller can’t refuse.
The Obvious: Bid the Most — Duh!
Money can’t buy love (although many might argue this point), but it can buy you a home you love. J But this isn’t just some crazy version of “real estate chicken.” It isn’t as simple as the person who puts their wallet away first loses. There’s actually a lot more that goes into winning your home than simply outbidding the competition. Let’s look at some of the nuances of bidding wars.
1. Hit ‘Em With a Pre-Qualification
Money talks, but getting prequalified is what speaks the loudest to sellers. Why? Because it shows you’re a serious buyer and, more importantly, you can put your money where your mouth is.
Yes, you could make it rain by going way over a seller’s asking price, but if you haven’t already been prequalified, it might not matter.
As Ready Nest states, “It’s a seller’s market, and that means you may need extra ammunition if you want to place an offer on a decent home in a desirable location. A prequalification not only makes your offer credible, but also affords you an advantage should you submit an offer at the same time as another home shopper.”
Whether you’re prequalified through Homie Loans or another lender, this is the righteous power chord you want to strike right from the get go. That said, Homie Loans looks out for you more than the average lender by guaranteeing the lowest price or we’ll pay you $500. that for a competitive advantage?! This is just one more way we help you get even more house for your money. How’s
2. Break Out That Cash Money
If you’ve got it, flaunt it. Cash offers on homes are extremely attractive to sellers because it means there are no chances of loan issues or any other roadblocks.
CNBC agrees: “Sellers don’t want to deal with the possibility that your loan might not come through, or they may not want to wait the extra time for the mortgage processing, so they prefer cash. In some cases they may even cut the price a bit to get the cash. Coming with cash can actually double your chances of winning a bidding war.”
But unless you live like Scrooge McDuck, you probably don’t have the entire asking price ready and waiting in your bank account. So, just pay as much as you can in cash! This will sweeten the deal and has a good chance of putting your offer above all others.
3. Don’t Hate, Escalate
With Phoenix’s competitive real estate market an escalation clause is something to consider. With an escalation clause, you agree to outbid any other offers by a specific amount, up to a predetermined cap. This helps to keep the ball in your court, even if a bidding war ensues.
For example, you might offer $250,000 on a home with an escalation clause that says you’re willing to outbid any other bona fide offers by $5,000 up to $280,000. This means that if someone offers $260,000, you’ll end up paying $265,000 for the home. This strategy keeps you in the running but prevents you from grossly overpaying. Just like a cash offer, it shows you mean business.
But before you jump on this train, keep in mind that it’s not foolproof. Some sellers might be frustrated by an escalation clause because they’ll be gunning for your highest offer from the get-go. It signals that you are willing and able to offer more for the home than the listing price.
4. Waive, If You’re Brave
It’s not without some risk and we wouldn’t always suggest it but in some cases waiving the inspection contingency can get you the inside track.
As you may already know, the inspection contingency is a part of every standard real estate contract and is designed to protect the buyer. How? It gives the buyer the legal right to back out if unacceptable issues are found in the home after inspection.
But if you waive the inspection contingency, you’ll be agreeing to buy the home as-is, even if you find out there’s a three-generation rat family living in the walls or if there’s a major structural crack in the foundation. Without that contingency in place, the home is yours, rats, cracks, and all.
On the flip side, it could also turn out that the home is in great condition and you hit the jackpot by being brave enough to use this seller-enticing strategy.
Is this a gamble you’re willing to take? Do you have the financial means to fix potential issues if they come to light after you’ve bought the home? The age of the home, overall quality and condition are important considerations in determining if you are willing to roll this dice.
5. Flex Your Flexibility
When it comes to the seller’s desired closing date, being flexible can score you the home. It might mean you’re inconvenienced, but if the end result is that modern Central Phoenix home with a walk-in closet even Cher Horowitz would be jealous of? Yeah, it’s worth it.
“Let’s say someone outbids you by a few thousand dollars, but you’re willing to give the seller more time to move out. That flexibility can make you the front-runner in a multiple-bid scenario. On the other hand, if a home is already vacant, sometimes you can win the seller over by offering to close in a shorter time,” Nerd Wallet advises.
This could be especially attractive in the instance that the seller is buying and selling at the same time. The key to this strategy is communication. Ask the seller what their preference is and let them know upfront that you can be fluid depending on their needs.
6. Send Them a Love Letter
A personal connection can work wonders for making you the new owner of the home of your dreams.
Consider including a personal letter with your offer. Tell them a bit about yourself, what you love about the home, why you’re excited to move to that neighborhood, and any other personal, heart-warming details you are comfortable sharing. If you own a ridiculously cute pet bunny rabbit or child, by all means show it off.
“Don’t be afraid to show your attachment to the home; sellers like to know it will be more than just an investment to you,” Investopedia suggests. “Instead of writing, ‘Your house is so beautiful. It’s just what we’re looking for,’ try, ‘Our twins are almost two years old, and we can already picture them playing happily in the fenced-in backyard and sleeping peacefully in their cozy rooms.’”
Have plans to convert the basement into an interactive deadly reptile enclosure? Leave that part out. Sellers don’t want to know you’re going to give their beloved home a total overhaul.
Hitting a Homer With Homie
With Phoenix homes flying off the market at lightning speed, it might feel like you’ll never end up winning your dream home at the right price. But that’s why Homie’s here.
As a Homie buyer, you’ll have licensed real estate agents and experts available to help guide you through the process from start to finish. Plus, you can qualify for a refund of up to $5,000 that you can put toward closing costs.
To make things even more convenient, you can also get prequalified through Homie Loans. And there’s a good reason 9 out of 10 Homie buyers go this route: it streamlines the process and ensures you’ll close on the house in a timely fashion. In fact, a large national lender just ranked Homie loans in the 1% of loan officers when it comes to speedy closings. Our team of lawyers and agents will also help you navigate all the tricky stuff, like counter offers, negotiations, and addenda.
Basically, we’ll be here for you every step of the way. Homie’s got your back.
Bid Like a Boss
In the game of homes, you either win or you die. There’s no middle ground. OK, hopefully bidding wars never get this intense, but you get the point.
From cash offers on homes and pre-qualifications to waiving the inspection contingency, a battle can’t be won without a strategy.
Use the tips outlined here to create a customized game plan that enables you to craft the winning bid with confidence. And, don’t worry, Homie will be riding gallantly by your side the entire way.
Ready to learn more? Sign up to be a Homie buyer today!