Even though the global pandemic has caused a serious economic downturn in America, the real estate market has held strong. Median home prices are increasing and homes are selling faster than they were a year ago. The lockdown has shown us all how important homeownership can be. As a result, buyers are flooding the market. Unfortunately, sellers are not returning at the same rate. Inventory of homes for sale is low, which makes the market more competitive for buyers. In fact, many buyers may face a bidding war when making an offer on a North County home. Here’s what you need to know to make sure your offer comes out on top.
Get a mortgage pre-approval
First things first – you must get pre-approved for a mortgage if you’re serious about buying a North County San Diego home. With so many buyers in the market right now, your offer will not stand a chance against other offers if you haven’t been pre-approved for a mortgage. Getting pre-approved shows the seller that they can take your offer seriously and that you’re less likely to have trouble securing the financing necessary to close on the home.
Pay all cash
There’s only one reason you wouldn’t need a mortgage pre-approval, and that’s if you’re going to pay with cash. If you have the available funds, then paying all cash will definitely make your offer attractive to a seller. The process of closing on a mortgage has many challenges that can derail a deal, such as a low appraisal or problems with the inspection. Paying all cash helps you to avoid these difficulties and speeds up the closing process considerably, which will be music to the ears of most sellers.
Make an offer immediately
If you have the good luck of finding an off-market home or one that has just been listed, then you may avoid a bidding war entirely by making an offer immediately. This, of course, requires that your offer is generous and limits contingencies – you want your offer to be as hassle-free as possible. To ensure you won’t be competing with other offers, put a time-limit on the offer – anywhere from four to six hours. But remember – you need to make them an offer they can’t refuse.
Write a letter to the seller
This strategy can be effective when you’re making an offer on a home where the seller has lived for a period of time. It does not work as well on a real estate investor, such as someone who is flipping the house. The letter should contain an emotional appeal to the seller and outline all the reasons you love the home and imagine a happy future living there.
Consider an escalation clause
If you’re willing to increase your offer against competing bids, then consider adding an escalation clause to your offer. An escalation clause confirms that you’re willing to increase your offer if another buyer outbids you. An escalation clause will not work in all scenarios, so talk with your agent about whether or not you should include one in your offer.
Work with the Clark & Gilman Team
Finally, working with a trusted professional who has decades of experience in the North County San Diego market is a must if you want to win a bidding war on your dream home. Contact the Cristine Clark & Jamie Gilman Team today at 760-758-1211 or [email protected]. We are always available to answer all your questions and help you through every step of the real estate process.