Let’s face it, it’s no secret the market is heating up again in Hilton Head Island and Bluffton SC. The year started with extremely low housing inventory and while inventory levels are up due to the season, overall there is more buyer demand for homes than there are homes available. It’s the law of supply and demand and when demand outweighs supply, scarcity is created and prices go up! That’s a stark contrast to the market we were in just a year and a half ago when supply outweighed demand.
For example, homes popping onto the market in Hilton Head Island and Bluffton, SC that are well-priced are quickly finding suitors in the form of multiple offers in in just a few days of being listed for sale. Often times, these properties are selling for more than asking price. It can be a very stressful and frustrating process for home buyers looking to purchase. So how can you set yourself apart and win that deal?
1. Pay cash. Cash is King! and there’s a good reason it is. Typically, an offer to purchase with cash has less chances for falling apart than one with financing so sellers prefer this method of payment.
2. Get pre-approved for a loan. If you can’t pay in cash then getting pre-approved for a loan is the next best thing. It is highly recommended you get pre-approved before you start house hunting because you don’t want to wait to get pre-approved after you find the house you want to make an offer on because offers that aren’t accompanied by pre-approval letters are usually discarded and it takes a little time to get one so you could miss out on that perfect house.
3. Offer more earnest money. Your typical buyers are offering $1,000 to 1% of the offer price. Set yourself apart by putting more skin in the game. Remember, your earnest money is protected provided you abide by the terms and conditions of the sales contract. If you breach contract then the seller will keep the earnest money. However, working with a strong agent will ensure you’re limiting your exposure so more earnest money will set you apart because it offsets risk to the seller. For example, planning to put 20% down? Consider putting 5% down as earnest money. I’ve helped clients win offers these past few weeks by putting up $5,000-$8,000 in earnest money when everybody else is doing just $1,000.
4. Stay lean with contingencies. In this market, overdoing it with requests will hurt your chances at winning the offer. Stick to 7-day due diligence periods. That’s more than enough time to do all your homework. Keep financing contingencies to less than 30-days. A strong lender and property organization on your behalf means you can get a loan done in about 3 weeks. If the numbers look good, consider foregoing the appraisal contingency and reassure the seller that if the home doesn’t appraise that you will work with the seller to pay the difference or absorb the extra cost. Again, working with a strong agent is important because you’ll know your numbers and the risk.
5. Write a personal letter to the seller. While this strategy doesn’t work too well with corporations or executors of estates, they do very well with traditional sellers. In the letter, write about how you love the home, how you’ll take care of it and reassure the seller your financing is strong and you will get the deal closed.
These are but just a few strategies and tactics you can use to set yourself apart to win a multiple offer scenario. Hilton Head Real Estate Partners will be glad to assist you in your home search.