Buying a home in a seller’s market can sometimes prove to be a daunting and disconcerting affair, especially for new and inexperienced buyers. But as entrepreneur Corey Shader points out, anyone can navigate this tricky market and come out on the winning end of a real estate bidding war if they know what steps to take.
The following tips, he adds, will help just about anyone gets the home they desire regardless of the market’s state.
Make a Strong First Offer
It’s always best to avoid getting into a bidding war. And one way Corey posits people can do that is by making a solid first offer. A strong offer that fits into their budget might hook the seller in and make it difficult to turn down.
Be Prepared to Bid
While they are to be avoided, bidding wars are sometimes inevitable and so it’s best to be prepared nonetheless.
With that said, a useful strategy people can employ is to ensure that while their first offer is strong, it also gives them some wiggle room to increase it to match other potential buyers also interested in the property.
By starting the bid at 90% of their maximum budget, buyers can strategically set their offer to climb by as high as 10% without exceeding their budget.
In a seller’s market, sometimes the deal goes to the buyer who is the most qualified. If two similar offers are submitted, sellers will typically go with the buyers who present the best terms.
Conventional mortgages that don’t require a lot of hoops to jump through are what sellers prefer. USDA, VA, and FHA mortgages are all great for buyers, but they have many requirements for the home itself.
In general, offering to purchase the home in cash, and not through a mortgage is even better. And those who can afford it should consider doing so.
Reduce the Contingencies
Corey Shader says it’s wise to consider removing typical barriers to closing a deal in a strong seller’s market. Buyers could include reducing the standard closing time from 30 or 60 days to as little as 15. And depending on the home, waiving standard contingencies such as home inspections could also be considered.
While reducing contingencies exposes buyers to more risks, it, however, separates them from other bidders, presenting them to the seller as an easier and faster sale.
About Corey Shader
Corey Shader is a self-made entrepreneur, consultant, investor, real estate developer, and founder of several companies – notably Insurance Pipeline. Operating primarily out of Ft. Lauderdale, Corey’s endeavors span the nation, consulting for start-ups and sitting on the board of digital media and senior healthcare agencies. As a consultant, Corey helps young businesses develop sales funnels and maximize profitability. Corey Shader takes pride in challenging others to push themselves to be their very best — he believes in constant self-improvement, inspiring others through sharing his own life experiences.