Mortgage Advice

How to Make a Competitive Offer When Buying a House in a Seller’s Market

June 22, 2017

This is a guest blog post from Tom Lipinski of the Tom Lipinski Team at Keller Williams Lakeside Realty.

For sellers, the metro Detroit housing market looks great! For buyers, it’s a different story, especially with summer being prime home buying season. In today’s seller’s market, homebuyers are currently being faced with increased competition and bidding wars.

If you’re shopping for a house, you want to offer the best possible price that works within your budget. Learn how to make a competitive offer when buying a house in a seller’s market so you don’t miss out on the perfect home.

  1. Get a letter of pre-approval.
    If you don’t have a hefty sum of cash, getting a letter of pre-approval is the first, and arguably most important, step to buying a house. This powerful piece of paper will help you determine how much you’re eligible to borrow and give your offer a competitive edge. Learn more about the benefits of getting pre-approved for a mortgage loan.
  1. Find a real estate agent.
    Your real estate agent will help you determine what the perfect house means to you. When meeting with your realtor, be sure to ask if the market you’re buying in is in favor of the buyer or seller. This is very important as you consider negotiating the very best deal.Time is of the essence in a seller’s market. Should you find yourself in this situation, you and your real estate agent need to be quick to view new listings as they become available. Responding slowly can put you into a competitive situation with other buyers. In a buyer’s market, speed is less important.
  1. Make an offer.
    You found “the one.” Your real estate agent should query the seller’s representative and determine if there are other interested buyers and offers. Assuming other buyers are interested, you will need to draft an offer that is more appealing to the seller than the other offers. In a seller’s market, here are a few ways to make your offer stand out:
  • Make a strong offer, possibly over the asking price. If your budget allows it, let the seller know that you guarantee the provided purchase price, regardless of the appraised value.
  • Increase your earnest money deposit. A higher deposit will garner more attention and will show the seller that you’re a committed buyer.
  • Shorten the home inspection period. It’s best to act fast! Have an inspector ready to go within three to five days.
  • Be willing to give the seller the post-closing occupancy that they are seeking, or consider allowing them to occupy at little to no charge.
  • It never hurts to have your mortgage lender contact the seller’s agent to express your great qualifications and answer any questions they may have.
  • If possible, honor the seller’s special requests and do not ask them to assist with your closing costs.

Everyone wants to buy a home for the best possible price, but sometimes extraordinary measures need to be taken if you want to prevail in a seller’s market. These tips will enable you to write a competitive offer.

Do you have a question for Tom? Connect with him on Facebook or leave a comment below!

Real Estate Agent Tom Lipinski knows a thing or two about buying and selling homes—he’s been helping clients from West Bloomfield to Birmingham to his current Shelby Township location do exactly that for over 20 years. Over time, Tom has built a reputation for excellent client service and results through hard work, integrity, deep knowledge of the Michigan residential real estate market, and a genuine desire to help others. Through up markets and down, Tom’s clients have always been able to count on his commitment to them, and that will never change.