How to Write a Successful Offer in a Low Inventory Market

A recent bank note from Jefferies said the US was short 2.5 million homes, while Freddie Mac put that estimate higher at a shortage of 3.8 million. Black Knight reported that there are 40% less homes on the market than years before, resulting in many buyers experiencing the discouraging feeling of losing out on a home they wanted. With increased competition, it’s imperative for buyers' agents to do everything they can to improve the odds of the offer being successful.  Buyers should enter the housing market with an open-mind. This may mean reconsidering certain must-haves. It may be unrealistic to find the perfect home in such a hot market. Some boxes may have to be left unchecked and compromises will more than likely need to be made. Make sure to prioritize your list of must-haves so that the most important ones are fulfilled. It’s also imperative that buyers have a real estate agent representing them. You need an expert realtor to advise you on current market conditions and normal procedures. The agent will help you assemble the rest of your team- like mortgage officer, title, insurance, warranty, inspectors and can recommend service providers. Even before you write the offer, your agent can inquire with the listing agent about any preferences of the seller not mentioned in the listing as well as to use the proper contract forms and addendums. To increase your chances of your offer being selected, consider doing any/multiple of the following:Get pre-approved from a local lender and include documentation with the offer to purchase. Have the lender phone and email the listing agent to expound on pre-approval Increase the amount of earnest money Acknowledge flexibility on closing and occupancy dates Eliminate unnecessary contingencies Waive the appraisal and have proof of funds to meet the difference in the purchase price Avoid asking the seller to pay concessions or cover closing costs Avoid including personal property to go with the sale unless specified in listing agreement Purchase "as is" with right to conduct inspections for informational purposes only Shorten time frames on necessary contingencies Attach proof of funds for down payment or full purchase price if cash Escalation clause ... offer to pay $X,XXX more than highest acceptable offer up to a limit Make your best offer first because they may not make a counteroffer   If you’re looking to buy a home, contact us or call 410.465.6900 to see how we can write you the most successful offer in this low inventory market today!   Source

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