30 Jun Become a Home Bidding Pro
Throughout the country, local housing markets have been plagued by low inventories of available homes, a factor that has sent many home buyers into bidding frenzies. With buyers in no short supply, home sellers are finding that the offers with the most money on the table aren’t always the most attractive. Many home sellers are paying for piece of mind that their transaction will go as smoothly and painlessly as possible.
“What sellers really don’t want to do is waste time,” said John Walsh, president of Connecticut-based lender Total Mortgage, to CNN Money.
So how can you, as a home buyer, edge out all those other bidders? Here are a few tips to win over home sellers without having to bid over your budget:
Offer Cash
Cash is king, and if you have it now is the time to use it. Over the last few months, a sharp increase has been noted in all-cash sales, more than 40 percent. It’s no secret that all-cash sales are infinitely more appealing to home sellers because since the housing crash, the process to securing a mortgage has become more and more arduous. With cash sales the seller is already certain that the buyer is qualified and nobody has to sit and wait for the loan approval process to go through.
In some situations, many sellers have been known to accept a lower offer just because it’s all in cash.
Get Your Mortgage Good to Go
If you don’t have the cash to put down on a home, fear not as being well-prepared by pre-underwriting a mortgage can give you an edge as well. Getting a pre-underwriting for a mortgage allows lenders to review all of your income and asset documentation in the pre-approval process. This gets everything set on your end so the seller will know when you make your offer that your mortgage application will not be rejected and the transaction can flow smoothly.
Keep Contingencies Reasonable
Contingencies are clauses in contracts that are made to protect buyers if certain conditions are not met. For example, a buyer can sign a contract that will allow them to back out of a deal if a buyer cannot be found for their own home. In extreme sellers markets, such as those that many areas throughout the country are experiencing, this contingency is often waived as homes are moving rather quickly on the market.
One contingency that should never be waived is the home inspection. Should an inspector ever find a major problem that could cost you, the buyer, far too much to fix, you will want to know before signing off on the purchase.
Be Number One
Keep a constant watch on the market and be vigilant. When a home comes on the market, see it as soon as you can and be prepared to make your offer. Getting you bid in early will allow you to preempt any other offers and make a diligent first impression for the seller.