In McCall, just as in many places around the country, demand for housing is outpacing availability. This is especially true in our area for single family homes under $300,000 as many buyers are looking to take advantage of current low interest rates.
But, when supply is down, prices go up. According to new data from the National Realtors of America, prices rose 6% in the fourth quarter of 2014 as buyers competed for fewer and fewer available homes for sale.
As a seller, this is good news as it could mean that you will get asking price for your home and sell quickly. As a buyer, this may mean that you need to prepare yourself for bidding wars.
But, before you find yourself in the midst of a bidding war there are a few things you should consider, beginning with asking yourself if you should even enter into it in the first place. According to Michele Lerner at realtor.com,
“If your offers have been turned down by several sellers because of competing buyers, then you may feel pushed to make an aggressive offer for the next home you like.
You should stop yourself from competing just because you think the time is right to become a homeowner or to move up into a new place. Instead, think about whether you really want the particular house enough to fight for it.
To guard against making an emotion-fueled offer for a house, take a hard look at your finances. While it may feel good at first to beat out other buyers and to purchase a property, it won’t feel so great in a year or two when you are struggling to make the payments on a house beyond your means. Know your limits before you begin to bid.”
If you determine that you do, indeed, want to go for it then you need to be strategic in how you present your offer. Make sure you use an experienced local realtor with the ability to communicate well and who will move quickly to present offers and counter offers. Then check with your lender. Find out the max you can borrow and be prepared to begin bidding at a lower amount, which may mean looking for homes in a lower price bracket.
When presenting an offer, don’t always assume money is the main motivator for the seller. Again, from Michele Lerner, here are other ways to make your offer more attractive:
- Solid financing: You may be competing against cash buyers, so make sure your loan pre-approval is in place and you have completed all required documentation other than identifying a specific property.
- Eliminate contingencies—carefully: If you own a home now, you may want to offer to buy another home without making your contract contingent on the sale of your current home. You take the risk of carrying two mortgages for a while, so make sure you can safely handle the payments. You can also decide to have an “information only” home inspection rather than making your offer contingent on the outcome of the inspection.
- Make the settlement date convenient for the sellers: Rather than negotiating on a closing date convenient to all sides, you can tell the sellers you will work with their schedule or rent back the property to them after the closing.
- Offer to pay all closing costs: You can reduce the sellers’ out-of-pocket expenses by offering to pay their share of the settlement fees, but before you do this get an accurate estimate of what those costs will be and make sure you have the funds available to pay them.
- Personalize the transaction: Sometimes the tipping point for sellers who receive multiple offers is something emotional rather than financial. A personal letter describing your love of their home may tilt the scale in your favor.
- Try an escalation clause: Money talks, too, so you can add an escalation clause to your offer that increases your bid by a certain amount above other offers. Just make sure you set a limit on how high your offer will go.
- Control yourself: Remember that any offer is subject to an appraisal (unless you waive that contingency, but that’s not recommended unless you have plenty of cash), so be careful not to bid above the market value of any property.
If you are considering buying or selling a home in today’s market, using Haden Tanner as your realtor is a natural choice. Haden has become intimately involved with the Valley County real estate market over the past several years and knows how to get things done quickly and efficiently. Call him today at (208) 315-2242 to begin the buying or selling process.
