You probably already know that the 2021 market is crazy. If you’re a buyer, trying to get an offer accepted right now is difficult, so today I’ll share the five ways that you can fight back against the competition and craft an aggressive offer to help you stand out in today’s market:
1. Don’t max out your search price. If you’re pre-approved up to, say, $700,000 and you’re looking at properties between $680,000 and $720,000, you’re setting yourself up for failure. Instead, look into the range between $635,0000 and $655,000. That will give you enough room to get aggressive with your offer and go over asking price.
2. Target properties with all reports. This is important because the market calls for buyers to waive the inspection contingency. If you go after properties that have no reports, you can’t compete—that’s a fool’s game. Look for a property that has all the reports done, and then come in strong. That way, you know exactly what you’re getting into before you waive the physical inspection contingency.
3. Find your “Uncle Bob.” By that, I mean find a general contractor you know, like, and trust. Have this contractor come to your home before you release your physical inspection contingencies and have them do a walk-through of the house and review the reports with you so that you understand the condition of the house.
4. Build an appraisal deficiency. In today’s market, the sales that happened before January are very different from the sales that happen after January 1st. When you do the appraisal, the appraiser pulls the comparable sales from the last six months. This can make it very difficult to find the value for a seller, whose primary concern is that their house appraises in a market that is going up dramatically. One way to be competitive as a buyer is to come up with additional cash to fill in the gap from a low appraisal.
5. Work with a lender who can provide a full loan approval. That means working with a lender who has looked at every document you submitted and took it to the underwriter; the only thing they’re waiting for is the appraisal. At that point, you have a full loan approval. Buyers who work with lenders who do that have the opportunity to release their loan contingency, which makes their offers much stronger.
Ultimately, shortening or limiting your three contingencies—physical, appraisal, and loan—is a great way to stand out in today’s market so that you can get the home that you want. If you have any questions, please feel free to reach out to us. We’re always happy to help.