Tips for Making a Winning Offer in a Tight Housing Market

A hot housing market is hard on buyers, but these tips will give you the advantage you need.

With interest rates remaining low and the pandemic driving people toward homeownership, the housing market across the U.S. has gotten incredibly hot. And that’s not just in major cities, but nearly everywhere, as people reassess where and how they can live and work.

To buy a home in a seller’s market, you need to appeal to the seller and craft the most attractive offer possible.

Find an “ethical pit bull.”

For every deal, there’s an ideal realtor—for some, you’ll need a patient sweet talker; for others, you’ll need a hard-charging go-getter. Don’t be afraid to interview several Realtors to find one ready to take on your home search and land you your dream house. In a tight market, you want to be working with a realtor who is assertive and determined—a “pit bull” who is brave, energetic, who will hang on and not give up until they see your offer through.

Be friendly and flexible.

This is not the kind of market to make the usual asks, such as for whole-house cleanings, rigid possession times, or nit-picky inspection items. Consider your seller’s unique situation and write an offer that is as friendly as possible.

Submit a pre-approval letter.

Forget about pre-qualification letters, which are the easier, less-specific estimates of what a buyer can afford. Go ahead and commit to the pre-approval process and have that letter from your lender in hand to submit to your seller to demonstrate you’ve got the funds to back up your offer.

Consider cash.

If you’re able to muster enough cash from a prior home sale or substantial savings, a cash offer can give you a major advantage in a hot market. While it’s not ideal to drain your savings and investments to pour into a house, you can utilize something called delayed financing. Delayed financing is a way of purchasing a home in which you pay cash upfront, then immediately refinance to mortgage the property, which returns a large portion of cash to you.

Shorten your inspection period.

It’s very important to allow yourself time to have a home inspected before purchase, but shortening the window of days to allow for inspection—for example, from 10 or 11 days to three or four—indicates you are serious about buying and want to move on your offer quickly.

Go for the heartstrings.

It doesn’t hurt to put pen to paper and write the seller a note detailing how much you love the home. Selling a house is an emotional process, and homes can represent enormous investments of time and money as well as a treasure trove of memories for sellers, and knowing their home is going to be in good and appreciative hands can help sway a seller in their decision process.

A hot market with low inventory certainly presents a challenge to buyers, but with a little flexibility and creativity, you can craft an offer that appeals to the seller and walk away with your dream home. At the heart of every financial goal is a great plan—and a financial planner can help you get there. Schedule a consultation with one of our financial planners today.

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