How Can I Make My Offer Competitive Enough in Today's Market?
A seller’s market can be difficult to navigate for unprepared buyers. Fierce competition between buyers gives sellers the luxury of being picky while letting higher or more appealing offers roll in. Making your offer stand out in the sea of bids takes work, but it’s certainly possible. Below you’ll find our top five tips for making a competitive offer in a seller’s market to help you get a leg up on the competition.
1. Show Sellers You’re Qualified with a Pre-Approval
Pre-approval is virtually required in a competitive market, as it shows the sellers you’re qualified and serious. Many sellers use pre-approvals as a filter to weed out less promising buyers to avoid wasting time with people who may not be capable of purchasing their property. Even if you can afford the home you’re looking at, sellers have no way of confirming that without a pre-approval.
A pre-approval alone won’t make your offer attractive to sellers, but you will find it hard to catch their attention without one.
2. Maximize Your Down Payment
A great way to distinguish your offer from the rest is to maximize your down payment. Most people think that their down payment only affects their lending, but it can also influence the seller. A larger down payment signals good intent and shows the seller that you’re in a good position to close a deal quickly.
Buyers who can only afford a minimum down payment are more likely to back out late in the proceedings if other expenses pop up, creating hassle and frustration for the seller. Even though your down payment doesn’t directly affect the seller financially, many sellers use it to estimate the likelihood of closing a successful deal.
3. Make the Process Easy for the Seller
The easiest way to give a seller cold feet is to make the deal dependent on something out of their control, like the sale of another home. Buyers often want to delay their purchase until their current home sells, but making a seller wait in a competitive market is a surefire way to lose. Your best bet is to make a seller feel comfortable by agreeing to their timeline without any contingencies.
4. Be Prepared to Offer Over the Asking Price
We know this isn’t what you want to hear, but seller’s markets routinely see properties going for over the asking price and sometimes over the estimated home value. Prepared buyers need to factor in their competition when they set their budget.
Many people understandably keep their down payment constant even when increasing their offer, which can be a mistake. It’s best to keep your down payment as a percentage of your offer if you can.
5. Get Ready for Your Move
Waiting until you’re under contract to make preparations for your move is one of the most common mistakes buyers make in a competitive market. Your offer can fall through even when you’re under contract, so delaying closing to make moving arrangements could kill the deal. Take time to read moving and storage company reviews beforehand, so you don’t need to think too much or delay when the time comes.
Where do we come in?
The final step in making that competitive offer on Southern Colorado Real Estate is hiring the right Realtor®. Code of the West Real Estate is your local expert and one-stop shop when you’re looking for a trusted Realtor® to help you find the perfect Colorado mountain home for sale!