With so few houses for sale today and low mortgage rates driving buyer activity. Here are three ways to win a bidding war since multiple-offer scenarios are heating up, so it is important to be in the best position possible before you start your home search.
Javier Vivas, Director of Economic Research at realtor.com, explains:
“COVID-19 has accelerated earlier trends, bringing even more buyers than the market can handle. In many markets, fierce competition, bidding wars, and multiple offer scenarios may be the common theme in the weeks to come.”
Here are three tips you can do to make your offer a competitive one when you’re ready to make your move.
1. Get Pre-approved
A recent survey shows that only 52% of active homebuyers obtained a pre-approval letter before they began their home search. That means about half of active buyers missed out on this key part of the process.
Buyers who are pre-approved are definitely a step ahead when it’s time to make an offer. Having a pre-approval letter indicating you’re a qualified buyer shows sellers you’re serious. It’s often a deciding factor that can tip the scale in your direction if there’s more than one offer on a home. It’s best to contact a mortgage professional to start your pre-approval process early, so you’re in the best position right from the start of your home search.
2. Present Your Best Offer
In a highly competitive market, it’s common for sellers to pick a date and time to review all offers on a house at one time. If this is the case, you may not have an opportunity to negotiate back and forth with the sellers. As a matter of fact, the National Association of Realtors (NAR) notes:
“Not only are properties selling quickly, but they are also getting more offers. On average, REALTORS® reported nearly three offers per sold property in July 2020.”
Make sure the offer you’re presenting is the best one the sellers receive. A real estate professional can help you make sure your offer is a fair and highly competitive one.
3. Act Fast
With existing homes going like hotcakes, there’s no time to waste in the process. NAR reports how the speed of home sales is ramping up:
“Properties typically remained on the market for 22 days in July, seasonally down from 24 days in June and from 29 days in July 2019. Sixty-eight percent of homes sold in July 2020 were on the market for less than a month.”
In addition, NAR notes:
“Total existing-home sales…jumped 24.7% from June to a seasonally adjusted annual rate of 5.86 million in July. The previous record monthly increase in sales was 20.7% in June of this year. Sales as a whole rose year-over-year, up 8.7% from a year ago (5.39 million in July 2019).”
For Connecticut in the month of August 2020 the median days on market was 35 days for single family homes compared to last August 2019 where the median days on market was at 50 days.
As you can see homes are being sold very quickly. Essentially, you may not have time to sleep on it or shop around when you find a home you love. Chances are, someone else loves it too. If you take your time, it may not be available when you’re ready to commit.
The housing market is very strong right now, and buyers are scooping up available homes faster than they’re coming to market. Follow these three ways to win a bidding war will put you in the best position when you are ready to make an off on a house. If you are planning to purchase a home this year, let’s connect to discuss the trends in our current area, so you’re ready to compete and win.
I am committed to the real estate market to make sure you have all the information you need to make your next move. Make sure to check out all the resources I have to put together for you on my website and if you have any real estate questions or even just want to meetup for a quick coffee, reach out to me anytime. I look forward to hearing from you. Have a great day.