So, you’ve been searching for that perfect house to call a ‘home,’ and you finally found one! The price is reasonable, and with the Northern Virginia housing market being so competitive, you want to make sure that your offer is as strong as possible so that you can be certain that your dream of making this house – your dream home – yours comes true!
Freddie Mac published “4 Tips for Making an Offer” in their latest Executive Perspective. The 4 topics they discuss are:
1. Understand How Much You Can Afford
This ‘tip’ or ‘step’ should really take place before you start your home search process.
As we’ve mentioned before, being pre-approved for a mortgage is just one of many steps that will show home sellers whether you – are or aren’t – serious about buying a home.
2. Act Fast
According to the latest Existing Home Sales Report, the inventory of homes for sale is currently at a 3.7-month supply this number is lower in most of the Northern Virginia National Capital area; this is considerably below what is considered to be the normal inventory of 6 month absorption rate. Buyer demand continues to surge past the homes available for sale. Making most of our market a Seller’s market with one exception currently.
3. Make a Solid Offer
Freddie Mac advises to make your offer the strongest it can be:
Talk with your real estate agent to determine what you can do to make your offer stand out in a highly competitive market! More on this on our tips and strategies below.
4. Be Prepared to Negotiate
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Your real estate agent will also be vital in the negotiation process, giving you guidance on the counteroffer.
If your contract is accepted, Freddie Mac urges you to “always get an independent home inspection, so you know the true condition of the home.” If the inspector uncovers undisclosed problems or issues, you can discuss any repairs that may need to be made with the seller, or cancel the contract. However in a highly competitive market you may want to look at other options at least as a consideration. An experienced real estate agent can show you these options as well.
7 of the most effective strategies to improve your odds when buying a home in a sellers market
Increase your down payment.
When competing in a home sellers market as we have now in Northern Virginia, you can enhance the appeal of your offer to the sellers and also the sellers’ agent by making a larger down payment. The more you put down and the smaller percentage you finance, the easier it will be to get the loan and the more attractive your offer becomes. So, whether you are planning to put down 0%, 5%, 10%, 20% or even more, but you could put down more than you are, then put down more! It will make your offer much more attractive. There are other strategies that you can incorporate when using this technique that will allow you to have your cake and eat it too.
Forget seller concessions
Think twice about requesting that the Seller pay for some of your closing costs; vacate the home prior to closing; allow you to take possession prior to closing, or anything else that makes your offer less desirable. If any of these things are necessary, for example, and you simply can’t buy the home without having the Seller pay some of your closing costs, then sit down with your real estate agent and find some way to compensate the home seller for the concession!
Cut inspection / contingency times where possible
While the new TRID rules have taken many time parameters out of the control of the transaction participants as they are now regulated, you can confirm with the home inspector prior to writing the offer to find out when the earliest they can do the inspection is and include this information in the offer.
Drop the Inspections Completely (Well almost)
While we always recommend that buyers have home inspections, in a very competitive market, having them as contingencies puts you at a distinct disadvantage to offers that come in without them. One strategy that can give you this advantage without all of the risk would be to have a pre-contract inspection (where permitted). When you find the home you want, bring your Home Inspector through the home – doing a quick major- item evaluation before writing an offer. This can allay some of the risk while giving your offer an additional sparkle.
Pick the best mortgage loan option
Not all mortgages are the same. Some have considerably more requirements of the sellers, and/0r being known for being used by Buyers that have poor credit scores and who may have difficulty qualifying. If you do not need to use this type of loan, don’t! Using these loans will put you at a disadvantage not only against other Buyers that are using loans that are more favorable to Sellers.
In Northern Virginia it is customary for a Buyer to put up earnest money with an offer – to be held in trust until closing. Buyers can offer anything. On one occasion, quite a while back, a Buyer client had absolutely no money to offer as earnest money. They were going to be borrowing against their retirement account to cover the down payment, but the rules of the retirement account prohibited them from accessing the money until settlement. So we needed something creative. The solution was to give the seller an IOU. While I don’t recommend this approach (particularly in a highly competitive market) if avoidable, the idea is to always look for solutions to situations to give you an edge or at least the chance to WIN. The greater the amount of your earnest money- the more skin you have in the game – the more favorably the Seller is likely to see your offer. (Free Home Buying Guide Click Here)
Outline your offer
It surprises me how seldom this is done and how important a step it can be. Have your agent write a short bullet point detailing the most positive and beneficial aspects of your offer. You should help them with this as well. Think about your offer and how accepting it over other potential offers could benefit the seller.
If you’re buying your first home or maybe your fourth, having a local Northern Virginia real estate professional on your side who is an expert in the market is one of your best advantages to make sure the process goes smoothly and you succeed in owning your new dream home. Happy House Hunting!
When it’t time for you to sell or buy a home (or both) in the Northern Virginia, your results will likely depend on the expert guidance, systems and services provided by your local real estate agent.
As your personal real estate agents we’re completely dedicated to providing our clients throughout Northern Virginia with most professional, unique and outstanding real estate experience based on our experience, training, superior systems. All customized for their unique situation and goals. We are committed to listening to our clients’ needs, hopes and desires because each person is unique. Therefore, in order to best help them, we at the Dave Martin Realty Group take the time to listen and understand you and your family’s needs and goals before we give advice. You and your home or future home are special so you deserve a custom designed plan just for you to reach — your goals.
We are experienced real estate agents that specialize in the Northern Virginia real estate market – and have the devoted ourselves to putting you, our clients, first. In fact you will believe you are our only client. When you want information on the local real estate market or are ready to sell or buy a property – contact us. There’s no obligation.
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Call (703) 585-4687
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