Denver is experiencing an extreme seller’s market. Stories of multiple offers, back-to-back showings, and crazy over-asking prices are becoming more and more common. While the idea of buying in this type of market may seem daunting, winning a bidding war and finding a home can be achieved with the help of a seasoned broker. Someone with experience on their side is essential in this type of market. Our brokers have the necessary knowledge to create a successful offer, strategically negotiate on your behalf, and help manage your expectations while guiding you through the process. We’ve compiled a list of some important things to prepare for when buying a home in this competitive market. With knowledge on your side, you can be confident knowing what it takes to land the home of your dreams.
Get pre-approved with a local lender or bank. Most listing agents and sellers will pick a buyer who has obtained financing through an institution they know so they can trust that the deal will get done without hitting any snags.
Be patient and be decisive. If you find you are making multiple offers but aren’t winning any bidding wars, or if you are seeing a lot of properties but not finding the right one, it is important to stay patient. And when the right house hits the market and you love it, be prepared to go after it and listen to your agent on how best to structure your offer. Be in it to win it!
Don’t get caught up with cosmetic fixes or inspection worries. The house will likely sell without the small issues getting resolved. Sometimes even the bigger inspection concerns won’t scare off buyers on a really unique property or a home in a prime location.
Be cautious of listing prices. If it looks like a good deal, chances are the listing agent priced it that way to spur competition, and the property will likely sell for a much higher price.
Look at listings that have been on the market for awhile. Listing agents might have overpriced the property, and it doesn’t necessarily mean that there is something wrong with it.
Making an Offer
Be prepared for an offer deadline. Once you’ve seen the property, a quick offer may not be the best strategy and might not even be considered. Many listing agents will set an offer deadline and “warehouse” all offers to be reviewed at that time.
You will likely need to make an over-asking price offer (and sometimes significantly) especially if it’s the property’s first week on the market.
Yes, you will feel like you’re overpaying! Be less focused on this outlook, and just know that this is a fact of buying in a competitive market.
Think outside the box. Get creative and include perks with your offer that will help make it stand out in the crowd. Strategies can include:
- Making a personal connection with the seller – find out if offering a rent back or ensuring a quick closing are in their interest
- Full or partial appraisal gaps
- Waiving inspection objection or inspection outright
- Waiving loan termination
- Increasing the earnest money, or having a portion of the earnest money become nonrefundable immediately or after inspection
- Offering a bonus to the sellers if they take your offer before the deadline
It’s important to have a game plan and stay on track while buying a home, and these tips can help manage what can feel like an emotional process in a fast-paced sellers market. Some journeys to finding a new home may be longer than others, but following the guidance of your broker while utilizing these strategies can help you achieve your ultimate goal.