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Are you ready to make an offer on a home in today’s competitive market? With insights from DCU, you can create a strong offer to stand out from the crowd.
Homes are selling fast in today’s competitive market. There’s more pressure to act quickly and decisively when making an offer on a home. You don’t want to miss an opportunity, but you do want to be confident that you’re making well-informed decisions.
In a seller’s market, it’s common for homes to get multiple offers that lead to a bidding war. And it can be harder to win when you’re a first-time buyer on a limited budget. However, you can improve your chances of getting your offer accepted with some smart strategies.
Choose an experienced real estate agent. Working with an agent who knows how to compete in a fast-paced market can help you win the home you want. Your real estate agent can guide you in writing an offer that stands out.
Get prequalified for a mortgage. A prequalification letter from a reputable financial institution puts you in a strong position to make an offer on a home. Getting prequalified for a loan shows that you’re a qualified buyer and you’re working with a lender ready to finance the purchase.
Make a competitive offer. Making a strong offer is key to winning the home you want when competing against multiple buyers. Consult with your real estate agent to find out how much homes are selling for in the neighborhood. Doing your research can help you make a competitive offer and prepare for a counteroffer.
Use an escalation clause. An escalation clause can be a useful strategy when you’re bidding against multiple offers. With an escalation clause, you agree to automatically increase your bid (up to a certain amount) if other offers come in that match or exceed your initial offer. This approach allows you to set your maximum bid ahead of time so you don’t get carried away in a bidding war.
Increase your earnest money. Putting up more earnest money shows you’re serious about buying a home. It sends a signal that you’re focused on buying a particular home and not just casually making offers on multiple homes. If your offer is accepted, the earnest money goes toward the purchase price of the home. And if your offer is not accepted, your earnest money will be returned to you.
Limit contingencies. Sellers may be more likely to accept a clean offer that doesn’t have contingency clauses or demands to make changes to the home.
Be flexible. Expressing a willingness to work within the seller’s requirements and timeframe could help your offer rise to the top. A seller may be more likely to accept your offer if you can be flexible with move-in dates and other details.
This article is for informational purposes only. It is not intended to serve as legal, financial, investment or tax advice or indicate that a specific DCU product or service is right for you. For specific advice about your unique circumstances, you may wish to consult a financial professional.