While having good house buying strategies is key to a successful purchase, quick action is critical in today”s hot real estate market. With so many buyers, and so many multiple offers, a delayed decision could quickly turn into a missed opportunity.
- Getting a comparative market analysis – A reliable real estate agent should provide a current Comparative Market Analysis. This will be computer generated, and will show the current market value of similar properties that are either for sale or recently sold. This is a good way to ascertain if a sale price is accurate, overpriced, or underpriced. And it’s a good way to develop an offer strategy and a negotiating strategy.
- Considering different market influences – Beyond price, there are other influences that will determine a purchase strategy. A good example is the time that a house has been on the market. This is clearly indicated on the actual listing, and should be a topic of discussion with the real estate agent. Obviously, the time on the market will be a sign of buyer interest (or not). A slow selling property will likely have a reason to match.
- An offer to purchase should be realistic – When ready to purchase, an offer should be in line with other potential offers, unless there is a bidding process going on. Depending on the circumstances, its vital for the purchaser to assess whether a low offer might be suitable, or if the deal requires an offer that’s above the listing price. This is where a real estate agent’s experience can really come in handy, especially during bid.
- Understanding the seller’s motivation – Having a good understanding of the seller’s motivation is as important as any market indicator. This will have a determining impact on an offer to purchase. Does the seller need to sell fast? Has the seller already bought something? Does the seller need capital to purchase the next property? In some situations, sellers are also known to be “motivated” and will accept offers accordingly.
- Assessing multiple offers when bidding – While offers are private and confidential, it’s strategic for the seller to divulge how many offers have been received. In this kind of scenario, buyers are influenced by both emotional triggers and financial constraints. Here again, a good real estate agent will keep the process balanced. Multiple offers preclude the option of negotiating the sale price, since an accepted offer is a done deal.
- Purchase deposits are non-refundable – When an offer is accepted, the deposit is usually non-refundable. As well, if a buyer wants to get a comprehensive home inspection, that cost is also borne. However, if the home inspection is one of the conditions of sale, then an unacceptable inspection could nullify the offer. At the same time, many sellers will accept an offer without any conditions far more readily than conditions.
- Ensuring legals/financials are in place – A well-prepared buyer will have a pre-approved mortgage for a specific amount. If this is a loose end, it’s a bad strategy. Indeed, some sellers may ask for proof of pre-approval, or will not accept an offer with conditional financing. As for legals, it’s critical to have professional advice when it’s time to make an offer or sign an offer. All of this will strengthen the position as a buyer.