How Can You Win as a Buyer in a Seller’s Market?
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In a seller’s market like ours, in many areas/price points here in St. Louis, multiple offers and bidding wars are common. As a homebuyer, being able to compete in these situations isn’t all about the highest possible price you can offer. You’ll have to pay a premium for the good homes, to be sure, but we’ve got some tips for you to help make your offer stand out in other ways so you have a better chance of an accepted contract.
One of the first things you can do is waive the appraisal rider. In this market, with inventory levels low in certain areas/price points, demand is high and many homes are selling for record prices. At the same time, a lot of these homes fail to appraise, which can cause a deal to fall through.
If you’re a cash buyer waiving the appraisal rider is less risky than if you’re buying the home with financing. If a home is being financed and does not appraise, you may have to come up with the difference between what your lender is willing to lend on the home and what the agreed-upon purchase price is.
"A fully underwritten pre-approval is coveted by sellers."
Another helpful strategy is getting your pre-approval fully underwritten by a lender. This can cut your financing contingency period down to just 10 days instead of the typical 30.
You can also offer to buy the home as-is. You still have the right to complete an inspection, but the seller will have the confidence that the purchase price is what they will end up selling the home for, versus having a "second negotiation", with inspection requests.
These are just a couple of strategies that are being used successfully by buyers in today’s market. If you have any questions for us or are looking to buy, sell, or invest in real estate, give us a call or send us an email. We would love to hear from you.
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I have $110k annual income with $40k cash available for down payment and closing. I have $603 P&I mortgage (personal residence) and $700 car payment - no other debts. In 2014 or 2015, I transferred an investment property to my lender as deed-in-lieu.
I want to purchase a home around $200k. Considering the aforementioned deed-in-lieu, do you know a lender who will make me a mortgage loan? I heard this might prevent me from getting another mortgage loan at this time. Thanks for your response.
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