With so few houses for sale today and low mortgage rates driving buyer activity, bidding wars are getting more common. Multiple-offer scenarios are the new norm, so it’s important to get pre-approved before you begin your search, as readiness and speed are a must if you’re looking to buy a home this season.
Javier Vivas, Director of Economic Research at realtor.com, explains:
“COVID-19 has accelerated earlier trends, bringing even more buyers than the market can handle. In many markets, fierce competition, bidding wars, and multiple offer scenarios could also be the common theme in the weeks to come.”
Here are three simple strategies you can apply to win a bidding war:
Pre-approved buyers that can show proof of funds are a step ahead when it’s time to put together an offer. Having a pre-approval letter indicating you’re a vetted buyer shows sellers you’re serious. Having a bank statement that shows your cash reserves for down payment is the cherry on top. It’s best to contact a mortgage professional to start your pre-approval process. We recommend using one of our trusted and preferred lending partners.
Present Your Best Offer from the Beginning
In a highly competitive market, it’s common for sellers to select a date and time to review all offers on a house at just one sitting. In many cases, you won’t get a chance to negotiate back and forth with the sellers. The National Association of Realtors (NAR) notes:
“Not only are properties selling quickly, but they’re also getting more offers. On average, REALTORS® reported nearly three offers per sold property in July 2020.”
In highly-desirable cities like Long Beach, we are experiencing averages even higher than that. Make sure the offer you’re presenting is your highest and best from the get-go so you don’t walk away with any regrets.
With existing homes going like hotcakes, there’s no time to waste within the process. NAR reports how the speed of home sales is ramping up:
“Properties typically remained on the market for 22 days in July, seasonally down from 24 days in June and from 29 days in July 2019. Sixty-eight percent of homes sold in July 2020 were on the market for less than a month.”
As you can see, the market is gaining steam and you don’t have much time to “sleep on it” once you find a home you’re keen on. The likelihood is that somebody else loves it too and (like #1 suggests) is ready to make an offer. If you’re taking time to decide what’s on your home-buying checklist, it’s likely the home won’t be available anymore when you’re able to commit, so have those conversations up front before you start your search.
The housing market is holding strong and buyers are scooping up available homes faster than they’re being replaced with new inventory. If you’re looking to purchase a home this year, connect with a local agent and expert who’s actively writing offers in this market so you’re able to compete – and win.