Don't forget to have a bank Pre-Approve You First
Here are a few easy-to-follow tips that can assist buyers in today's marketplace to stay on top of the game.
This type of competitive market can be exhausting for home buyers. The process of waiting to win the bidding war for a home takes patience. Since 1992, I've managed a brokerage located in O'Fallon IL. My agents tell me crazy stories about how the market impacts their clients. I've studied hundreds of sales contracts and have a an understanding of Realtors common strategies for getting their offers accepted. If you are looking for a realtor O'Fallon IL then you have come to the right place.
Today, I'll discuss some of the tips I have learned to help buyers be competitive in today's marketplace.
1. Pre-approve. You don't have the time or patience to look for the perfect house, then go to bank. You'll want to be pre-approved in order to prove to your seller you're serious and can afford the home. Contact your lender to discuss the monthly amount you feel comfortable with.
Listing agents get offers from buyers and then verify the lender's name and pre-approval letters. If the agent who is listing is a high-producing agent they'll be acquainted with many of the local lenders. Certain lenders have a bad reputation for sabotaging deals. If you are working with one of the lenders mentioned above the agent who is listing you will likely share this information with the sellers.
Get an experienced agent's suggestions on the most suitable lenders to assist you in getting the offer approved. In smaller towns, this aspect is more crucial in negotiating an offer. In smaller cities, real estate professionals tend to be more inclined to meet each other. The reputation and experience of your Realtor and Mortgage Broker can have a significant impact on the strength of your contract.
2. Make sure you're prepared. So that the seller is conscious that you are well-organized, your Realtor is likely to ask for earnest cash. Find out the best closing date of the seller and other factors that can sweeten the deal.
Every seller could have their own reasons to sell. For instance, one seller might be selling their primary residence through a relocation firm, while another may be selling an investment property. Each seller will offer terms that are appealing to them.
When buying a home in an extremely competitive selling market, it's advisable to have your Realtor get in touch with the listing agent before submitting your offer. Ask your agent to ask the agent for the seller what they are seeking in an agreement. If your agent can get this information, you are able to make your bid according to the most appealing terms to the seller. This will ensure that your bid will be at the highest of all lists.
3. Find a trustworthy realtor. I make sure clients are as prepared as possible when we meet. In addition to checking the internet for listings, we examine properties that are not on the market for our clients. This gives our clients an edge in the market.
4. Make sure you have an Escalation Clause. Escalation clauses are a clause added to a contract which states that the buyer has the right to increase their offer to the amount of sales they submit. The price of the contract of the buyer is automatically raised without having to file an additional contract or amend their current contract. This clause typically has a maximum amount of escalation. When a bidding war takes place, this method helps keep your offer at the top of the list.
Here's an example.
- Homebuyer A has offered $500,000 for a house valued at $490,000 and an escalation clause to increase the amount by $3,000 higher than the highest offer.
The house will receive 30 offer agreements. Buyer B's maximum bid is $550,0000.
In this instance the price of the contract of buyer A is automatically raised to $553,000.
This method is one of the most popular strategies used to beat the competition in a highly competitive marketplace.
You should only utilize an escalation clause if you can afford to escalate your offer to a level that is higher than the amount listed. Escalation clauses immediately place your bid at the top. However, the disadvantages are that they could be used to manipulate the listing agent , causing you to pay more than your contract price. Contact us if you need a realtor in O'Fallon IL.
If a seller's agent has an escalation clause it is possible for them to approach other buyers to push the price up. After they've reached the maximum of the price, you're paying a specific dollar amount over the price.
Escalation clauses gained popularity in the year 2018 and have since become the norm in a number of real estate areas that are in low to average price ranges. If they aren't properly structured they could be difficult to understand. Check that your Realtor has a solid understanding of this concept prior to implementing this method.
Things to Remember
As a buyer of a home in a highly competitive marketplace it is crucial that you are flexible to accommodate any specific requirements that the seller might have. Every seller has their own needs. You'll be able to beat your competition when you can react quickly and respond to their requirements.
You may need be inventive if want to sell your house prior to buying a new property. Sellers with multiple offers on their property will not accept contracts contingent on another home selling. Sellers would like to avoid as many delay and contingencies as they can. We can assist you to quickly locate buyers in this highly competitive market.
It is also possible to consider leasing your home out to an AirBnB or temporary rental to allow you the freedom to move. While this could be risky since there is not much available inventory, it can give you the edge that you need to convince that the seller to sign your contract. You might have more money available to help the sale to be completed faster.
Some companies will buy your home after you've found another property, but this is typically a charge. The demand for houses rises each year, lenders and realtors are getting more imaginative. If you're planning to sell your home, take the time to look into companies that can assist you in purchasing another home.
Don't hesitate to contact me via email, phone or mail if interested in purchasing or selling. I'm looking forward to hearing from you.
Address: 1003 East Wesley Drive Suite C, O'Fallon, IL 62269