Buying a home involves a lot of steps, some stress, and (in today’s market) a lot of trial and error when submitting offers. After seeing how the Boise area real estate market has worked since the first quarter of 2020, we have these 5 tips for sellers to help them find success when submitting offers.
Hire a real estate agent
Of course we would put this first, but it’s the truth. When you hire a real estate agent, you meet with him/her, get to know each other, and built a relationship based on trust. This trust will help your agent fully advocate for everything on your behalf and in your best interest, as well as finding amazing homes for you based on your personal wish list and budget. Buying a home may seem hectic, but agents do this every day for multiple clients. Your agent will help you through the process in a calm and collected manner.
Know your budget
This is the crux of homebuying. Knowing how much home you can afford will tell you where you can start your home search. Talk to your agent about lender recommendations. They can refer you to lenders they have worked with in the past and have given clients a great experience. The lender can help get you pre-approved for a mortgage, which is one of the most powerful tools you can have as a buyer. Getting pre-approved will tell you your budget and shows you are a serious buyer, which can give you an edge over other buyers in a bidding war.
Buckle up for a fast ride
Everything about real estate in 2020 and 2021 is fast-paced. The National Association of Realtors (NAR) reports that homes are on the market for an average of 17 days nationwide. In the Boise area, that number is less than half that. A skilled agent will look for homes that fit your budget, so you must be prepared to tour the homes and make an offer hard and fast to be competitive. If you find a house on your own that you want to submit an offer for, tell your agent immediately so they can submit the offer paperwork ASAP.
Your offer must be strong, but fair
Prior to the pandemic-induced real estate market taking off with no brakes, negotiating an offer at or below the asking price could net you a good deal and the sellers still made money from the sale. In today’s market, that is no longer the case. the NAR reports that listings get an average of 5.1 offers and half of them sell for over the listing price nationally. In Boise, homes can get a dozen offers and nearly all listings sell for over listing price by $20k to $100k over asking. This has helped Boise see the highest and fastest home price growth in the nation. The final point is the summation of the whole article.
Flexibility is key
This final step is where it all comes together. Working with an agent you trust to advocate for you, knowing your budget, and actively looking for the right house for you comes down to the negotiating table. The sellers may like your offer but might provide you with a counteroffer that may suit their needs better. Your own flexibility may be the key to winning the bidding war. Providing flexible move-in/move-out dates rentback options, minimal contingencies, or appraisal gap coverage can help you stand out in the final stretch. In addition, anything you can do to create a meaningful connection with the sellers and the seller’s agent may help your chances of getting moved to the top of the pile.
Our one piece of advice on removing contingencies is to keep inspection and appraisal contingencies in nearly every case. While it’s true that some buyers will remove all contingencies to win the offer, that leaves them vulnerable to hefty surprise repair bills, or living in a home that didn’t appraise as high as the sold price. Without these contingencies in place, you could end up house rich, but cash poor. A home is an investment that you want to make work for you.