If you have been reading my columns these past months, you would know I have been talking about the Denver real estate market converting to a seller’s market. In keeping with that theme, I wanted to pass along some tips to frustrated buyers who are getting outbid for the homes that they want. There are some things that any buyer can do to put themselves in better position to win the home. Here are a few ideas:
1) The majority of buyers look at homes on weekends. So it’s no surprise that listing agents get multiple offers on weekends. If possible, try to look at homes in the middle of the week. If you can go and look at homes during the day when most people are at work, it would be even better. I understand you make an offer when you feel the time is right, but also understand that when you do it on the weekend or nights after work, there’s a good chance that someone else will be doing the same thing.
2) You must have your ducks in a row. Buyers must be prepared to pull the trigger and write a contract when they least expect it. That means that you must be pre-approved by a lender and have your lender letter ready to go with your offer. You must also have your earnest money deposited in your account so you can submit a check with your offer. Finally, you must be sure of your terms and timing so your agent can prepare an offer quickly and have it submitted.
3) Be prepared to go over the ‘asking price.’ I know that this is difficult to come to terms with, but yes, homes are selling again over the asking price. The key thing to remember is not to get caught up in the moment. Offer a reasonable amount over the asking price, because if you offer too much and are getting a loan, it may not appraise. If it doesn’t appraise for the purchase price, then you will be paying the difference between the appraised price and the purchase price as cash at closing.
4) You can use an escalating clause. This can be written in the additional provision, saying something to the effect that “the buyer would be willing to pay_____ (amount) over the highest written and signed offer.” The key here is to state the amount you would be willing to pay over the highest offer. The second key is to make sure that you are only paying higher than actual written and signed offers in possession of the listing agent.
Let me know how this works and happy house hunting.
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