As we round the corner into the final months of a most unusual year, the housing market continues to stray from its typical seasonal cycle. The COVID-19 pandemic that began in the spring has effectively delayed the normal spring “boom,” creating increased buyer demand in the second half of the year. This, coupled with record low interest rates resulting in higher home prices, has created a strong seller’s market. So how do you negotiate the purchase of a new house when market conditions aren’t in your favor? Champion Title, one of the top rated title and settlement agencies in the DC Metro region, can help.
Be prepared to quickly draw up your offer. Time is of the essence in a seller’s market. Increased buyers and decreased inventory mean multiple offers on any one property. Rely on your realtor for guidance on what you will need at your fingertips to quickly put your offer together.
Do not offer below list price. With multiple offers on the table it is unlikely your dream home will sell for under list price. Make sure you are competitive by offering at least asking, and be prepared to pay more than this.
Increase your earnest money deposit. The bigger the earnest money deposit, the more attractive your offer is to the sellers. Check with your realtor on what he/she recommends as standard, then think about doubling or even tripling that. Remember, you will pay this money at closing anyway.
Do not make any additional requests or ask for favors. The more complicated your offer, the less competitive it is. Now is not the time to be asking for a fresh coat of paint on the front door or for the deck furniture to convey.
Delay your possession of the property. On the contrary, offer the sellers a favor by allowing them extra days to move out after closing. This is a benefit most buyers might not think to extend and will set you apart from the rest.
Include preapproval and proof of funds documentation with your offer. Upfront proof that you are prepared to purchase will again make you a more attractive buyer. Make sure the preapproval letter is from a local provider, match the preapproval letter amount to your sales price, and date it the same date as your offer.
Ask your agent to get offer tips from the listing agent. Make this easy on the buyer by providing the right offer the first time. Have your realtor contact the listing agent to find out exactly what the sellers want to see and skip the lengthy counteroffer process. Omit this step and you run the risk of a better offer from someone else entering the picture while your counteroffer is being negotiated.
By following these tips you can rise above the competition and increase your chances of winning the home of your dreams. Once your offer has been accepted, Champion Title will gladly guide you seamlessly through the closing process. For more information or questions regarding any of our services, please call us at (703) 444-4100, or visit our website at www.championtitle.com.