Southern New Hampshire is experiencing one of the hottest real estate markets in recent history due to low inventory. There is a lot more demand than there is supply, giving sellers all the negotiating power. So what’s a buyer to do?
It’s not always about offering the highest price. Don’t get me wrong, the offer needs to be strong, but coming in with favorable terms for the seller can improve your position over a buyer who’s coming in with a slightly higher offer. That being said, I have a few tips you can use if you’re looking to buy a home in this seller’s market:
- Be financially ready.You need to have a pre-qualification letter. Many offers get overlooked because the buyer is not yet qualified.
- Consider your loan type. Conventional loans are considered a little less risky than an FHA loan. When viewed side by side, the offer with the conventional loan will have the edge.
- Shorten your loan approval time. Once you’ve gotten a pre-qualification letter, continue to work with your lender to get pre-approved. A pre-approval means you can shorten the commitment time on the purchase of the home. It also shows the seller you are taking the necessary steps to get your mortgage.
- Consider pre-inspecting the property. If you can get the property inspected prior to writing a purchase in sale, you can omit the contingency for inspection on your offer. This will put you in a great spot compared to other offers with inspection contingencies.
“Getting your offer accepted isn’t always about offering the highest price.”
- Waive the appraisal contingency. If you are comfortable that the price you’re offering is the price you’re going to pay, you can remove the appraisal contingency. If you can’t afford to do that, consider offering a premium above the appraisal, which means you’re willing to offer a certain dollar amount above what the appraisal values the home at.
- Earnest money. Typically earnest money is between 1% and 3%. Offering between 3% and 5% lets the seller know you are in a good spot financially.
- Consider non-refundable funds. If you’re comfortable with the property and your ability to get a loan, you may want to make your earnest money non-refundable.
- Favorable closing date. Find out when the seller wants to close and let them know you can be flexible. In many cases, the seller might not know exactly when they will be able to move into their new home. Giving them some flexibility will make them feel more comfortable with you as a buyer.
- The “New Love Letter.” For some time now, buyers have found that a letter or an email can tug at the heartstrings of a seller and maybe help sway their decision in your favor.
- Consider making a video. Pull out your cell phone and make a recording of you and your family. Let the seller know how much you appreciate the house and how you can see yourself and your family growing in the home. Upload it to YouTube and send it as a private message to the seller. This can make a real difference when it comes to being noticed.
If you have any questions on this topic or are looking to buy or sell a home, please don’t hesitate to give me a call or send me an email. I look forward to hearing from you.