Orange County California and specifically the Irvine area is very competitive right now. Home prices are soaring and there’s a lot of competitive offers. So how do you get your offer to rise above the rest? Here are five simple ways to get the house you want in a very competitive market.
#1. Understand the market and be informed.
Before you rush out and start placing an offer on just about every house on the market to see what sticks, do your research. Understand the micromarkets of individual neighborhoods. If you need help simply ask your real estate agent. As a specialist in this particular area I know that micromarkets are crucial to the general real estate trends and while houses might be selling rapidly and one neighborhood, a few miles away they might not be selling as fast. Don’t waste your money by making a competitive offer on a home that may not have the same interest as in another neighborhood. You don’t want to over pay for the home and if your financing a property, over offering could mean that you won’t get the home anyway because you can’t get financing on an overvalued property. Speak to your real estate agent and get a good plan of attack so that you’re ready when the right home hits the market.
#2. Get your finances ready to go.
Don’t look at homes first and then try to figure out the financing. In a competitive market you have to move fast and having a preapproval letter ready to go knowing that you can afford all the homes that you’re offering on will put you ahead of the game. Make sure you have that preapproval letter to present with your offer so that sellers know you are serious and you’ve already done the financial homework necessary to purchase the home. Your offer will be more attractive than a buyer that does not have their financing lined up.
#3. Consider an escalation clause.
I say ‘consider’ because in a competitive market you may or may not need this addendum. An escalation clause states that you will pay up to a certain amount in specific increments over the highest offer. However, you need to make sure that if your financing the home the lender will cover this inflated amount. If the home is below market value the this is a good way to increase the value and present a more attractive offer to the seller. For instance: if the home is priced at $400,000 and you are approved at $450,000 but the home is underpriced, you can offer the full amount of $400,000 with an escalation clause stating that you’re willing to go up to $430,000 in $5000 increments over the highest bid. This doesn’t necessarily mean you’ll have to pay the $430,000 but you’re willing to go that high if another offer should come in between the $400,000 price and the $430,000 price. However, you need to ask for proof that there is a higher offer. Sellers can’t just say that they have a higher offer to get more money out of you.
#4. Have good communication between the listing agent and your buyers agent.
You need to work with a buyers agent that is a great communicator. Your buyers agent can communicate with the listing agent just how much you love the home and are willing to work with the seller. Perhaps the seller needs a unique closing time, certain days to move out or need certain accommodations. If you really want the home your buyers agent can convey to the listing agent that you’re willing to work with the seller in the confines of their timeframe and their arrangements.
#5. Waive the home inspection.
This is a very tricky tactic and one that should not be taken lightly or hastily. There are several reasons you might want to wait the home inspection. Perhaps the home was recently inspected and the seller will offer you a previous home inspection. While I always urge all my buyers to have their own home inspection, there are certain contingencies where waving the home inspection could be in the buyers benefit however, each situation is unique and this should be discussed with your real estate agent before simply neglecting this vital point in the home buying process however, by doing so, it could appeal to the seller and speed along the process making your offer the most attractive choice.
Each home is unique and each purchase and sale contract can be negotiated and tailored to fit the buyer and the seller. In a competitive market many buyers want to appeal to the sellers in every way possible but without spending too much money or making poor choices, there are simple ways to make your offer stand out among the rest.
For more details or to find out information about the micromarkets around Irvine California please contact me today.