Guest post by Gary Coats, Realtor with United Country Wagner Auctioneering & Real Estate
The 2020 real estate market is off to an incredibly fast start!
A February 21st press release from the Indiana Association of Realtors confirms that January 2020 home sales are up 17% from January 2019. Additionally, the Average & Median Sales Prices of homes increased for the 98th consecutive month.
According to IAR President Bernice Helman,
..there’s simply not enough homes to satisfy demand. It’s a great time to sell…
As a home seller, this is great news. Increasing home sales, increasing home prices, and continued lack of inventory means that this truly is a seller’s market.
From a buying side, homebuyers should expect an increasingly competitive market with other buyers also vying for the same properties.
In this active real estate market, an experienced Realtor may be the difference in the whether or not you acquire your dream home. The possibility is high that in any situation, your offer will be one of multiple offers on the same property. How do you increase the probability that your offer will be the one chosen?
In a multiple offer scenario, a knowledgeable Realtor will use one or multiple tactics to give their buyers the highest chance of winning. They will consider many factors in order to ensure that their client’s offer will be competitive.
Here are a few tools that your Realtor should be using in today’s market:
Multiple Offer Notification/“Highest and Best”
Once the buyer is notified that there are other offers on the property, they may have the opportunity to submit a new purchase agreement. This could includes changes to the price, terms, or both, within a specific time set by the seller.
The Escalation Clause
This gives the buyer the ability to increase the purchase price incrementally based on certain specified events, without submitting a new offer.
Differing Loan and Lender Types
The loan program you choose could affect your ability to be a competitive buyer on specific properties. In some cases, a seller may favor a buyer’s mortgage approval letter from a local lender verses one that they are not familiar or comfortable with.
Closing Cost Concessions
Seller concessions can assist the buyer with Closing Costs. The allowed amounts are based on a percentage of the purchase price, which varies based on loan type. These concessions will affect the seller’s bottom line and therefore the ability of a buyer’s offer to be accepted.
Property Tax Prorations
In many transactions, Property Taxes are pro-rated to the day of closing. This method ensures that both the seller and buyer only pay for the time that the property is in their ownership. The buyer does have the option to assume some or all of the property taxes due from the seller. This can be used to make a buyer’s offer more attractive to a seller.
The buyer and seller negotiate when the buyer will take possession of the property. This can be a determining factor in whether or not an offer is accepted.
Personal Property Considerations
Some sellers will negotiate on the inclusion of certain personal property items in an accepted purchase agreement. Discretion must be used to maximize the competitiveness of an offer.
In a Multiple Offer scenario, most sellers will not consider an offer without a pre-approval letter or a proof of funds letter from a buyer’s lender.
Of all the proven advantages of selecting a Realtor that will work for you in transitioning your dreams into reality, the first and most important step rests with the buyer. A serious buyer must get Pre-Approved for financing and know their loan type and target purchase price range.
Any action taken by a Realtor to put buying clients at a competitive advantage with multiple offers will be compromised if the buyer is not already Pre-Approved for a mortgage, because time is of the essence when competing in an active market.
Having an experienced Realtor on your side makes you a truly empowered buyer and provides you with the tools you need to win in a competitive market.
There are many benefits to working with a Realtor in your real estate transaction, not the least of which is that, as a buyer, you pay nothing for the services of your Realtor! A Realtor’s services come at no cost to a home buyer. A Realtor’s commission is paid out of the home seller’s proceeds.
Don’t lose out on your dream home. Find a Realtor with the tools to help you succeed in today’s competitive Seller’s Market.
Gary Coats – REALTOR®
United Country Wagner Auctioneering & Real Estate
104 N. Main St.
Farmland, IN 47340
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