A recent article on RealtorMag had some valuable advice for home buyers when it comes to making an offer on a house. These tips are especially important in a competitive market, like we have been seeing in Columbia County lately.
Making an Offer: 5 Mistakes to Avoid
“Time kills deals,” says Andrew Sandholm of BOND New York Properties in New York. “Dragging your feet means you could wind up paying more in a bidding war situation or missing out on the property altogether.” Buyers need to be ready with their paperwork, such as bank statements, a preapproval letter, and documents supporting proof of funds, from the day they begin house-hunting mode. That way they can pounce quickly with an offer when they do find a home they like.
2) Making an Offer for Their Preapproved Amount
Smart buyers are getting preapproved to show a seller they’re financially able to purchase a home. However, Chuck Silverston, principal at Unlimited Sotheby’s International Realty in Brookline, Mass., warns buyers against using that document to come up with an offer amount.
“Many buyers come in with a preapproval for the exact offer price, but when you’re competing against other offers, including cash offers, you want to show financial strength,” Silverston says. “An exact preapproval could make a listing agent nervous because not only does the buyer not have any wiggle room to negotiate, but they might no longer qualify if interest rates rise.”
3) Submitting a Lowball Offer
Lowballing a seller often backfires, particularly in a seller’s market. “A lowball offer that isn’t backed up with math or comparable sales data is disrespectful and could turn off the seller and possibly mean you will miss out on the property completely,” Sandholm says.
4) Waiving Inspection Contingencies
“I don’t care whether it’s new construction or even your mom’s house you’re buying from her – get it inspected,” urges Joshua Jarvis of Jarvis Team Realty in Duluth, Ga. Further, if you waive the inspection contingency in your offer, you may lose the earnest money if you later back out of the deal.
5) Not Presenting Yourself Well Enough
In a seller’s market, buyers need to take steps to make sure they look good in the eyes of the seller. “In today’s highly competitive environment, the listing agent is trying to determine which buyer will be the easiest to deal with,” Silverston says. Buyers may want to avoid pointing out every defect, making nitpicky queries, or questioning the seller’s tastes.
“Basically buyers who act less than enthusiastic will see themselves at a competitive disadvantage when sellers are comparing multiple offers,” he says.
SOURCE – realtormag.realtor.org
Jeff McKinney is a Realtor in Columbia County, NY (Beach & Bartolo Realtors ~ 34 Main St., Chatham NY 12037 ~ 518-392-2700). Connect with him on Twitter, Instagram, LinkedIn, or Pinterest.