Tips for making an offer on a house in a tight market.
Does trying to buy a house feel like a full-time job? If you’ve been frequently outbid or struggling to find something in your price range, it’s not just bad luck. Inventory levels are low across the country, including in St. Louis and Kansas City, where the average time to sell all houses on the market has been hovering at around two months.
When the pressure’s on, and your dream house is on the line, there are some things you can do to prepare to help increase your chances. From saving up to securing financing, here are some tips for increasing your chances of getting your offer accepted.
Get your finances in order.
Before you start looking at houses, review your credit, save up for a strong down payment and get preapproved for a mortgage. Run the numbers ahead of time to assess what you’ll be able to realistically afford so you know you’re only looking at houses you can compete for.
Being preapproved helps cut down on the time it takes to secure a mortgage. It says more about your financial standing than a prequalification letter – which is based on your income alone – and helps you come across as a confident buyer to the seller.
Work with a local real estate agent.
Find an experienced professional who knows the area. A real estate agent can help you hone in on the best properties for you and your budget. They’ll likely sign you up for a database that gives you access to more listings than you might find on your own. Then, when it comes time to put an offer on a house, their knowledge will be invaluable when you’re crafting an attractive offer and quickly navigating the often overwhelming process.
In addition to hunting online, drive around your intended neighborhood and scout for properties. If you find a house that you like, go see it as soon as possible. Do as much research on the property ahead of time as you can so that you step into the open house informed and ready to act if you like it.
Be organized and prepared to submit an offer right away. Ask your real estate agent to call, not email, to inquire, and submit an offer as quickly as you can.
Put your best offer forward.
In a competitive market, your offer may be one of many. Work with your agent to identify an amount that is within your price range but still enticing to the seller. Putting down a large down payment or earnest money deposit can help show you’re serious. Offering a cash down payment can also go a long way.
Avoid adding contingencies if you can, as they may make your offer less attractive. Including a personal letter is a good emotional appeal that can help you stand out to the sellers.
If the sellers go with another buyer, it may still be worth putting in an offer if you really like the house. It never hurts to be there as a backup in case negotiations fall through during inspections and financing.
While it can sometimes feel impossible, you do have a good shot at buying a house in a tight market – if you prepare. The key is to move quickly, make an attractive offer and show you’re a confident buyer. Working with experienced professionals will increase your strength as a buyer.
At Commerce Bank, we work with you to make the financing process as seamless as possible. If you need to get preapproved, we’re happy to help you get started.