As of March 2021, most neighborhoods have less than 1 month of inventory. That extreme shortage of inventory is creating bidding wars, more competitive than what we saw back in 2016. On average most homes are selling 10% but certain properties are going 20-30% above the List price. How can a Buyer successfully buy a home in this market?
The most popular and effective strategy we recommend is the Go “ALL-IN” Strategy. We have helped over 10 buyers this year find homes with this strategy. On average, our buyers are finding homes within 30 days, sometimes the first week!
Here is a high-level overview of the “ALL-IN” Strategy:
-Send us any homes you are interested in immediately! We will try and see the house soon as possible, and submit an offer ASAP (even if there is a review date). If you are waiting until the open house, the house could sell before then.
-The goal is to submit an early offer that is SO AMAZING that the sellers won’t be able to refuse it, and they will accept the Offer BEFORE the review date.
-Be prepared to offer 10-30% ABOVE the list price
-5% for Earnest Money (release as non-refundable)
-Waive all contingencies!
Waive inspection: Many sellers are offering a seller-procured home inspection (which is awesome!) If not, we have a special program where we will split ½ the cost of any -Pre-inspections/sewer scopes that you pay for. (Reimbursement at Closing time).
Waive Financing/ Appraisal: If you’re not financially able to waive (cover) the appraisal, you could use a Form 22AD (Additional Downpayment) and offer to cover a low appraisal up to a set amount (like $10K). It really depends on how much cash you have. I will run a Comparative Market Analysis of the home (CMA) similar to what an appraiser will prepare, so you’ll have confidence in your offer price & escalation.
-Love letter to the seller: Many bidding wars come down to 2 very similar offers. That is where a sincere letter-to-the-seller can help out (I call it a tie-breaker).
-The X-factor in bidding wars is the agent-to-agent relationship and rapport. I started doing real estate back in 2011. I have always tried to be very professional and friendly to other real estate agents, which is why Beach & Blvd has one of the best reputations in the agent community, and why we always win the close bidding wars. Listing agents want to work with an experienced, professional and friendly agent if they can. They will often times give us a chance to match/beat the other offer in those situations so they can work with us.
Note: Everyone has their own Risk Tolerance, and depending on what yours is, plus other factors like how much extra cash you have access to, how solid is your financing, how much do you like the house, etc. all of these factors will determine the type of Offer we write & submit.
If you don’t want to go “ALL-IN”, we can utilize alternative buying strategies:
-Buy new construction. (Note: more and more new construction are having review dates and bidding wars). We have access to off-market, new construction pre-sales that are not available to the public / are not on Redfin/Zillow/MLS sites.
-Look at homes that don’t have a review date and get your offer submitted ASAP.
-Look at homes that have a review date but did not get any offers. (Search for homes with 8+ days on market)
-Look for homes that need some work, like a cosmetic fixer or estate sale. We do about 25 remodels / year for our listings, so you will have access to our general contractors, electricians, plumbers, painters, landscapers, etc.
These alternative strategies have different levels of success, depending on neighborhood/ price point, and your timing (how soon do you need to move?)
Contact us for a more in-depth Buyer Consultation, and we can discuss the perfect strategy for your individual situation.