If you’re planning to buy a home this season, you’re probably thinking about what you’ll need to do to get your offer accepted. In previous years, it was common for buyers to try and determine how much less than the asking price they could offer to still get the home. The buyer and seller would then negotiate and typically agree on a revised price that was somewhere between the buyer’s bid and the home’s initial asking price.

In today’s real estate market, buyers shouldn’t shop for a home with the same expectations.

Things Are Different Today

Today’s housing market is anything but normal. According to the National Association of Realtors (NAR), the average home that’s sold today:

• Receives 4.8 offers
• Sells in just 17 days

Homes selling quickly and receiving multiple offers shows how competitive the housing market is for buyers right now. This is because there are more buyers on the market than homes for sale. When the number of homes available can’t keep up with demand, homes often sell for more than the asking price.

How Does This Impact You When It’s Time To Submit an Offer?

Market conditions should help guide your decisions throughout the process. Today, the asking price of a home is often the floor of the negotiation rather than the ceiling. Knowing this is important when it’s time to submit an offer, but you should also use that information as you’re searching for homes too. After all, you don’t want to fall in love with a home that ultimately sells for a price higher than what you’ve budgeted for.

The Mortgage Reports has advice if you’re looking to purchase a home in a competitive market. The article encourages you to be realistic with your housing search, saying:

“The best thing to do is set your budget and expectations ahead of time so you know how much you can afford to offer — and when to walk away. This will make negotiations a lot easier.”

Of course, when you’ve found your dream home, you’ll want to do everything you can to submit your best offer up front and win a potential bidding war. Knowing the current market is key to crafting a winning offer. That’s where working with an expert real estate advisor becomes critical.

A real estate professional will draw from their experience and expert-level knowledge of today’s housing market throughout the process. They’ll also balance conditions in your area to make sure your offer stands out above the rest.

Bottom Line

Understanding how to approach the asking price of a home and what’s happening in today’s real estate market are critical for buyers. Let’s connect so we can work together to create a winning plan for you.

In today’s sellers’ market, standing out as a buyer is critical. Multi-offer scenarios and bidding wars are the norm due to the low supply of houses for sale and high buyer demand. If you’re buying this fall, you’ll want every advantage, especially when you’ve found the home of your dreams.

Below are five things to keep in mind when it’s time to make an offer.

1. Know Your Budget

Knowing your budget and what you can afford is critical to your success as a homebuyer. The best way to understand your numbers is to work with a lender so you can get pre-approved for a loan. As Freddie Mac puts it:

“This pre-approval allows you to look for a home with greater confidence and demonstrates to the seller that you are a serious buyer.”

Showing sellers you’re serious can give you a competitive edge. It enables you to act quickly when you’ve found your perfect home.

2. Be Prepared To Move Fast

Speed and the pace of sales are contributing factors to today’s competitive housing market. According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), the average home is on the market for just 17 days. As the report notes:

“Eighty-nine percent of homes sold in July 2021 were on the market for less than a month.”

When homes are selling fast, staying on top of the market and moving quickly are key. After you’ve worked with your agent to find the home that suits your needs, they’ll help you put together and submit your best offer as soon as possible.

3. A Real Estate Professional Can Lead You to Victory

No matter what the housing market looks like, rely on a trusted real estate advisor. As Freddie Mac says:

“The success of your homebuying journey largely depends on the company you keep. . . . be sure to select experienced, trusted professionals who will help you make informed decisions and avoid any pitfalls.”

Agents are experts in the local real estate market. They have insight into what’s worked for other buyers in your area and what sellers may be looking for in an offer. It may seem simple, but catering to what a seller may need can help your offer stand out.

4. Craft a Strong, Fair Offer

In the past, offering at or near the asking price was enough to make your offer appealing to sellers. In today’s market, that’s often not the case. According to the latest Realtors Confidence Index from NAR, 50% of offers are above the list price.

In such a competitive market, emotions and prices can run high. Having an agent to help craft a strong, fair offer is critical in these situations. Your agent can help you understand:

• The market value of the home
• Recent sales trends in the area
• Current buyer demand

5. Understand the Seller’s Needs, but Resist Waiving Certain Contingencies

When crafting an offer, you’ll want to keep both your best interest and the interest of the seller in mind. Your trusted real estate advisor will help you consider which levers you could pull, including contract contingencies (conditions you set that the seller must meet for the purchase to be finalized). Of course, there are certain contingencies you don’t want to give up, like the home inspection.

Freddie Mac explains:

“Resist the temptation to waive the inspection contingency, especially in a hot market or if the home is being sold ‘as-is’, which means the seller won’t pay for repairs. Without an inspection contingency, you could be stuck with a contract on a house you can’t afford to fix.”

Bottom Line

Today’s competitive housing market makes it more important than ever to make a strong offer on a home. Let’s connect to make sure your offer rises to the top.