How do I get my purchase offer accepted in this CRAZY market?
Dear clients and friends,
Even with the increase in interest rates recently, today’s Las Vegas real estate market is still competitive for buyers. Las Vegas will not likeley be affected as other areas may because it has 4,000 people moving there every month from more expensive areas, like California. With all that cahs (the U.S. has $27 trillion in household equity today) from selling thier more expensive market's property, many of these buyers are able to weather these higher rates. If you fall in love with a home, chances are that other buyers have seen it as well, and you’ll have to compete against them to get your offer accepted. Even though interest rates have increased, there still aren’t enough homes to balance out our market. That means sellers have the upper hand, and buyers are forced to compete against each other. Fortunately, there are a few ways you can make your offer stand out to sellers:
Offer above the asking price. You’ll have to offer more than asking price if you want to win in a multiple-offer situation, but that doesn’t mean you’ll have to bring too much more money to the table. An extra $2,000 might be enough to draw the seller’s attention. As long as you don’t offer far more than the asking price, this shouldn’t change your monthly payment that much.
Limit your inspection. Many sellers worry about deals falling apart because of issues during the inspection. However, if you waive your inspection entirely, you could be on the hook for costly repairs. Instead, you can limit your risk by reducing the inspection period or agreeing to only ask for major repairs.
Cover the appraisal. With home prices having risen so quickly, many houses aren’t appraising for their final sales price. Normally, the buyer and seller would negotiate to see who’s responsible for the difference. However, you can make your offer more attractive by agreeing to cover a potential appraisal gap. If you’re already fully underwritten, you can waive your appraisal contingency entirely. If not, then you can offer appraisal gap coverage, which is where you’ll cover any gap up to a certain amount you choose. This may not be required in order to win a bid in the coming term.
Be flexible. Sellers might want different things concerning the timing of their sale. You can work with the seller’s agent and either offer an extended closing or a quick closing to coincide with the seller’s needs. Doing so can help your offer stand out to the seller. To sweeten the deal even more, you can also offer a leaseback agreement or post-occupancy period, where you let the seller stay in their house after closing to give them time to move and/or find another house. These agreements usually last for anywhere up to 60 days and can be a great way to offer your seller a flexible closing.
If you’re tired of competing, have hope. Interest rates are rising, and the competition from buyers is easing up slightly. While we still expect to see a seller’s market for a while, it may get easier to purchase a home in the coming months. Some Sellers may react dramatically or panic and, as a result, some good deals could surface in the coming months.
If you’d like to take a look at what’s presently available on the market, you can view our multiple listing service here:
If you have any questions about making your offer more competitive or buying homes in general, feel free to call or email us. We would love to help you navigate this market.
Always with sincerity,