So you finally found the right home — now what? You may think finding the house is the easiest part but now you have to place an offer. How can you make sure you close the deal?
Making a competitive offer on a home is the first step toward homeownership. However, market conditions can work for or against you if you want to obtain a great deal on your home. Not sure what we’re talking about?
We’ll tell you everything you need to know about how to place an offer in a buyer’s and seller’s market. Here are some considerations you should make to place a competitive offer on your home no matter the existing market conditions.
How Do Offers Work?
Before pulling the trigger, you should learn the basics of how offers work. You may think it’s only telling the seller how much you’re willing to pay for their home. However, your offer turns into a binding contract once the seller accepts it.
To place a competitive offer, it’s vital to consider important factors that can influence home pricing such as market conditions, location, among others. You should keep in mind that placing an offer in a buyer’s and seller’s market is different when it comes to pricing and even offer contingencies.
Besides pricing information, your offer will include details such as the conditional closing date, contingencies, duration of the offer, among other information. Placing a competitive offer that sways the seller is challenging mostly due to its technical nature.
It’s tough to track everything that goes into placing an offer. You should also keep in mind that after making your offer, it’s probable that you’ll have to negotiate the sale price and even certain offer contingencies with the seller. You may think doing it on your own is the only way but you should seek guidance from an experienced realtor who can help you draft and place a competitive offer.
How Much to Offer in a Seller’s Market
You may think you can place an offer only based on the listing price. However, you must make an offer according to the market conditions. If you’re buying in a seller’s market, it means that the housing market is hot.
Under these market conditions, homes can sell as fast as within a few days of being listed. When you place an offer in a seller’s market, you will compete against offers from other motivated home buyers to seal the deal. Some buyers even place offers above asking price to secure their dream home.
If you’re buying a home under these market conditions, you shouldn’t place an offer below the asking price. Since home sellers have the upper hand, you should be ready for little or no room for negotiation. Consider consulting with a real estate agent to gain insight into the best approach to placing a competitive offer in a seller’s market.
How Much to Offer in a Buyer’s Market
Making an offer in a buyer’s market is completely different from buying in a seller’s market. When a housing market is cool or slow, it’s known as a buyer’s market. Under these market conditions, properties stay on the market for a while and usually receive few offers far in between.
When you buy in a buyer’s market, you can secure a hefty discount by placing an offer below asking price. However, you should consider the price history of the property and recent sale prices of similar homes in the area. Performing a Comparative Market Analysis can help you get an idea of where your offer stands.
A CMA compares recent, expired, and listed homes in the area. While you can do it on your own, our Clever Partner Agents can create one for free and help you secure a better deal on your home.
Don’t be afraid of placing a lowball offer in a buyer’s market. However, you should seek guidance from a real estate agent.
A realtor can reach out to the listing agent to learn more about where the seller is at when it comes to selling their home. Most of the time, sellers in a buyer’s market want to sell their property as soon as possible which pushes them to accept lowball offers.
While market conditions influence your offer, you can secure your dream home no matter if it’s a buyer’s or seller’s market. Placing an offer is a complicated dance between buyers and sellers. First-time and seasoned home buyers can benefit immensely from partnering with a local real estate agent without paying any realtor fees.
A realtor can guide you every step of the way in your home buying process. A real estate agent such as one of our Partner Agents can provide insight into the current market conditions, draft a competitive offer, and help you buy your home in a buyer’s or seller’s market.