Demand for real estate is growing in many markets across the country, but especially in our special area of the Foothills. That’s great, but it creates competition in the form of all-cash offers, offers for thousands of dollars over list price, and a growing gap between affordability and prices in a given area.
If you are a buyer who needs to have their purchase financed – pay attention to these 5 tips that may help you secure the home of your dreams. Don’t forget that price is certainly a factor – if not the most important factor to a Seller – but these tips can give you an advantage when you’re trying to secure an initial commitment from the seller.
1. Get the Right Lender - Your loan officer’s reputation in the community is critical, especially among the agents who are controlling the deals. If your loan officer has a trusted name, recognition and a favorable presence in the local market, this can be communicated via the listing agent, who has a direct influence on what offer the seller takes.
2. Get the Right Buyer’s Agent - You’ll need a real estate agent to represent you if you’re going to be making offers on properties listed on the open market. Ideally, the person you’re going to want representing you is someone who has a reputation for delivering in the local market. This is especially important as many real estate agents network with each other and work with each other on a regular basis. If your buyer’s agent has a favorable reputation not only in the local community, but with the listing agent in a previous transaction, for example, this is a very good sign that person can influence the seller because they know the offer is strong and they trust the other side.
3. Get an Introduction to the Listing Agent - Upon your buyer’s agent (who’s representing you) offer submission, your loan officer calls the listing agent to introduce themselves and explain how well-qualified you are to purchase that property. Many listing agents inevitably call the lenders of the buyers whose offers are strong on paper in an attempt to feel them out about the buyer’s qualifications. Preemptively, taking this step is a favorable approach that makes it easier for the listing agent to influence the seller to accept your offer.
4. Understand How You Appear on Paper - It doesn’t matter if you have $500,000 in income; if you’re buying a home and putting less than 20% down, even if another offer is higher than yours, the offer with 20% down still looks stronger on paper to agents. Another approach to take to increase your odds of getting the seller to accept: Don’t request a credit for closing costs in your initial purchase offer. When you ask for a credit for closing costs based on whatever purchase price amount you are looking for, that gives the seller less net proceeds at closing — that is, unless you offer a higher purchase price and ask for a credit that way. But be aware, doing the latter means the house must appraise for a higher value to support your higher offered amount with your requested credits for cash to close.
5. Offer a Short Closing - Upon making an offer to buy a property, making an offer to close in less than 30 days is an aggressive approach, communicating to the seller that your financing is lined up and it’s time to play ball. Know that lenders are up against federal mandatory disclosure time frames and, as such, have certain thresholds they have to meet in order to be federally compliant with recent regulatory changes.
By making sure you’re covering all these bases when you’re making offers and getting acclimated to the local housing market, your odds of getting your offer accepted could dramatically increase. Don’t forget to seek out one of your local Meadow Vista Merchant Agents, who are willing and waiting to help you!
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