Navigating Home Offers in a Sellers’ Market
With homebuyers facing record-low inventory and increasingly high competition, many individuals are entering a high-pressure, quick-turn environment they may not be fully prepared for. Many homebuyers in the thick of the homebuying process may feel not only overwhelmed, but also underprepared for the lengths they may need to go to secure their dream home.
In today’s homebuying market, homebuyers are confronted with a critical decision – do you offer more than a home’s list price to secure the deal, or not?
Terms to Know in a Sellers’ Market
An appraisal is a valuation of a property that can positively or negatively impact the sale of a house or property.
An appraisal contingency is a clause that allows you as the homebuyer to back out of your contract if the appraisal value of the property is less than the agreed-upon purchase price.
If you waive the appraisal contingency, it means that no matter what the appraisal comes in at, you as the homebuyer will make up the difference. For example, if you offered $280,000 on a $250,000 appraised house, you will have to come up with the $30,000 difference between the appraisal and your offer.
Actions to Take
If you waive the appraisal contingency … be prepared to pay the FULL amount of your offer price. Many homebuyers think that they can put in an offer higher than the list price and wait to handle the details later – this is a mistake that can end up costing you thousands of dollars if you aren’t prepared to pay.
If you include an appraisal contingency … be prepared to be rejected by sellers. In today’s market, the more contingencies buyers build into their offers, the more likely sellers will reject them.
Strengthen Your Offer … Without Just Offering More
There are several ways you can strengthen your home offer without just offering more than listing price. As champions for prospective homebuyers, Ross Mortgage offers unique programs that will set you, and your home offer, apart from the competition.
Guaranteed Pre-Approval
A Guaranteed Pre-Approval from Ross Mortgage turns your home bid into a cash offer, enabling sellers to accept with confidence knowing it’s as strong as, or superior to, any other offer they receive.
Plus, if the mortgage can’t close for whatever reason, Ross Mortgage will pay the home seller $1,000—no strings attached. Our willingness to put our money where our mouth is isn’t a gimmick, it’s simply confidence in the way we do business.
Lock and Shop
Using Lock and Shop from Ross Mortgage means you can lock in your interest rate for up to 120 days. Homebuyers can lock in the interest rate that best suits them while they search for their dream home. Added bonuses of Lock and Shop include:
- A property address is not needed to lock the interest rate;
- You will not be charged up-front fees; and,
- You stay protected if interest rates increase.
If you aren’t sure what choice to make … talk with a professional to walk you through your options. Our Ross Mortgage team members are dedicated to ensuring our customers are fully prepared to make one of the biggest decisions of their lives – buying their dream home.
Navigating the market today can be an overwhelming experience. Speak with a Ross Mortgage professional today to help build your homebuying plan so you know your financing options and decide what offers are best for you.
