With low interest rates and a shortage in available housing the real estate market in Northern Colorado has seen dramatic increases in competition amongst perspective home buyers. The lower end of the market (for the purposes of this post, anything under $450,000) is especially competitive with most properties recieving multiple offers within the first 2 or 3 days on the market.
This process is difficult, and any homebuyer right now should prepare themselves to write offers on several properties before finally going under contract. However, not all hope is lost. There are a few strategies that you can employ in order to make your offer the most appealing, and this doesn’t always mean offering the most money.
When negotiating in real estate, there are two factors that play into every deal. The first of these is of course money. How much the seller stands to gain, and what the buyer has to pay. For many people this is where it ends, but real estate like life is more complicated then one number. The Colorado real estate contract is 18 pages long and there are many opportunities to create the ideal offer for the seller. When we represent you as a buyer, you can rest assured that the first call we make is to the other agent, to find out what factors are important to the seller so we can write the best offer. As a buyer you need to ask yourself a few questions to find out what you are comfortable with.
Can you provide a rent back to the seller. A conventional loan allows for this for up to 59 days. If you are comfortable with this, are you willing to pay for the entire time or will you need the seller to pay you, so you can pay your mortgage. Remember mortgages are paid in arrears so you will not owe anything until the 2nd month. You could feasibly provide a rent back to the seller for free for the first 30 days.
Can you be flexible with timing. Many sellers have other properties under contract with set closing dates or other timing issues. If you can meet these dates in your own contract and prevent the seller from having to move twice, this may be worth thousands to them allowing them to accept your lower price offer over a badly timed higher price one.
Does the house look nice enough that you are willing to have an inspection for major mechanical components only. If a seller recognizes that you aren’t going to try to Nickle and dime small time repairs from them at time of inspection they may feel more comfortable accepting your offer.
Money is of course important, but you need to ask yourself how much over asking price you are comfortable paying. We can utilize an escalation clause paying $500-1000 over any other offer up to your maximum, so you don’t have to worry about substantially out paying the competition. When writing an offer you also need to decide if you are comfortable bringing extra cash to closing to cover the difference between the appraised value of the property and what you have
These are just a few of the strategies we are currently using to get our clients under contract. All of this can seem overwhelming, contact us today and we would be happy to answer any questions you might have, and help you to workshop the best offer you are capable of performing on.