Tips for Buying in a Hot Sellers Market

So you’ve found your perfect home and your ready to make an offer only to find out there are 4 other offers all competing for the same property. What do you do? When faced with competing offers in a hot real estate market, there a few things you can consider to make your particular offer more attractive to sellers than the competition. The more attractive your offer, the more likely your offer will be accepted.

Purchase Price: In a hot sellers market with multiple offers on the same property this typically means the original listing price will not just be met, it will be surpassed. It’s important to know this going into a multi-offer scenario so you don’t waste your time making an offer under the asking price. That said, it’s equally important to know what comparable properties are selling for and how much over asking price you’re really willing to go to get the property. Most sellers view the purchase price as the most important aspect of an offer. However, the additional items listed below can also weigh heavily on a sellers decision so it’s important to find a balance that works for you while making your offer the best it can be.
Deposit Amount: While a typical deposit for a property is approx. 2.5% of the purchase price, consider raising your deposit amount to 4%, 6% or even 10% of the purchase price. A higher than normal deposit shows sellers you mean business and aren’t going to simply walk away from your offer.
Completion Date: Find out before you make an offer what the seller’s ideal closing date might be. Making an offer with a completion date that matches the seller’s target date can increase the desirability of your offer. Particularly if the other offers have shorter or longer closing dates which could be an inconvenience for the seller with their own plans to move out on a particular date.
Offer Conditions: Most offers come with conditions (e.g. arranging financing, home inspection, review of status certificate, etc). This means seller has to wait for days or weeks after accepting a conditional offer those conditions to be met rather than having the offer go firm right away which is the ideal scenario for a seller. When competing with other offers, consider waiving as many conditions as possible to make your offer too good for a seller to pass up. While I am not condoning waiving ALL conditions as a rule of thumb, I am suggesting considering this as a viable option toward your offer being successful. For instance, you may have received pre-approval for your mortgage which means you likely do not need a condition to obtain financing, you may have been provided the status certificate for earl review by the sellers agent which means you do not need to make it conditional to your offer. Regardless of what you decide to waive, be sure to consult your real estate salesperson and/or lawyer for more advice first.