By Holly Worthington
Finding a property and bidding for it in an inventory-shy market can be stressful, but there are strategies that can help you accomplish your goals.
While these strategies will help to induce a property seller to accept your offer, the strategies that are good for the seller can pose risk for the buyer.
Consider your own circumstances, the condition of the particular property and the market conditions as you evaluate these approaches.
1) Get completely approved for your financing with the remaining loan conditions being the appraisal and the title work.
Use a lender that agents have heard of. Most online lenders are hard to reach and may not know the local market. Some listing agents will counsel the seller that the financing is a question mark with an unknown lender. Agents count on the reputation of the lender to get the loan approved on time and to deliver what they promise to you.
2) Try to find a property that is off market.
Your agent can use their personal network and comb websites and the multiple listing service to find “coming soon” properties. Your agent can also mail letters to your desired neighborhood in the hopes that a homeowner may be willing to sell. Acting quickly to write a compelling offer can help a seller decide to work with you before offering the property on the open market.
3) Buy a property that has been sitting on the market.
Since these properties are often in poor condition, there may be more room for negotiation. A property that needs work will not appeal to most buyers, so you will have less competition. Risk: There is a reason the property has not sold. Thoroughly assess the property condition. The seller may have unrealistic expectations about price.
4) Put a large earnest money deposit on your contract.
A 10 percent earnest money deposit reflects your seriousness. The money will go toward your purchase unless you breach the contract. Risk: In some instances, the money can be tied up if there is a dispute about the parties performing on the contract.
5) Offer the seller a free two week rent back after settlement.
Sellers love to have extra time to move out. Be sure to get a security deposit from the seller so that any property damage can be covered.
6) Have a pre-offer home inspection.
With a pre-offer inspection, you can remove the home inspection contingency in your offer. Risk: If you are not the winning offer, you will have spent money on the home inspection.
7) Remove the financing contingency if your finances are strong.
Risk: You will be required to settle whether or not your financing is in place.
8) Remove the appraisal contingency.
Or, add language to it that the appraisal contingency will only be in effect if the property appraises a certain amount of dollars below the sale price. Risk: You may have to increase your down payment if the appraisal comes in low.
9) Hire a buyer agent who is skilled at negotiating.
A strong buyer agent who is well-respected and liked in the agent community can discover opportunities and work with the listing agent to accomplish your goals. Listing agents love working with other agents who they know will deliver.
Finding your next home can be an interesting and fun challenge. Having the right guidance is essential.
The writer has more than 30 years of Washington marketplace experience and was awarded the 2008 Washington D.C. Association of Realtors Realtor of the Year and Top Manager Company Wide. Her commitment to diversity, inclusiveness and to serving all segments of the marketplace has improved the lives of her staff, her agents and their clients.