Asheville and other cities in Western North Carolina are growing in popularity, and many people are choosing to move down to this area. Due to the recent influx of interested buyers, WNC residents know that it’s currently a seller’s market. Here are some practical tips to help you buy the home you want in a competitive market.
Make A Strong Offer
If you’ve found your dream home, consider your offer carefully. Your realtor can provide some insight, but ultimately, you are the one responsible for knowing how much you want to spend. If you come in too far below the asking price, the seller will dismiss you outright. They won’t consider you a serious buyer.
When buying a home in a competitive market, you may want to offer an amount over the asking price as a sure way to gain an edge over other offers the seller may have received. It also shows the seller how seriously you take the purchase. If you are worried about offering too much, you can also write in a clause that allows you to re-negotiate the price if the appraisal comes in lower than the price that you’ve offered.
If you decide to make an offer right at the asking price, try to pay completely in cash or make as large a down payment as possible. Money talks, and cash can be the deciding factor for a seller.
An escalation clause can also strengthen your offer. This clause indicates the amount of your initial offer but indicates your willingness to increase to x amount in case there is a higher offer on the table. This clause gives the buyer a bit of wiggle room and may guarantee more serious consideration from a seller.
Offering to pay for closing costs can also give your offer an advantage in a competitive market.
Sellers will often feel more comfortable when a buyer has the cash in hand to pay for the house. If the buyer has the money available, there will be fewer steps to take in the sale without the need of a mortgage. It’s also a nice benefit for the seller to have the entire amount of money available right away. When they are evaluating several offers, the element of cash will be a strong influence in their final decision.
Show Your Pre-Qualification Letter
In a previous post on Tips Every First Time Home Buyer Needs to Know, we talk about the importance of a pre-qualification letter. This letter comes from a lender that you’ve chosen beforehand and guarantees that you have the funds to make a purchase of a home in a certain price range. This note will reassure the seller that a third party has evaluated your financial situation and can vouch that you can afford the purchase. A pre-qualification letter will also put you in a better position to make an offer quickly.
A strong and straightforward offer can get your foot in the door and help narrow down the potential pool of buyers. However, when the negotiation phase comes around, it’s important not to nitpick over minor details or present a long list of contingencies. If you are under contract and send over a list of demands for things the seller has to change, they can easily cancel the contract and contact other interested buyers.
While the definition of “minor” can be subjective, consider the cost of your requests. If they refuse to replace a broken-down roof, that can be a deal breaker. However, if they refuse to make repairs that might cost a few hundred dollars, consider the risk vs. reward. If you draw a battle line over a few hundred dollars, you are risking losing the entire house. Your realtor can help you decide what changes may be minor and what would be worth negotiating.
Although there are many practical factors a seller has to evaluate when selling their home, sentiment can often play a part. If the home has many fond memories for the seller, they’ll want to make sure it goes to a family who will also appreciate the house and will make memories there as well. If you know there are several offers on the table, writing a letter explaining why you would love to live in the house may help give you a competitive edge. An elderly couple who is downsizing after their children have moved out may appreciate the fact that a young couple plans to move in and raise their children there.
There are a lot of factors to consider when buying a home in a competitive market. If you want more expert advice on purchasing a home in WNC, we are happy to provide it. Give us a call today.