Denver Real Estate Home Shortage
Denver is experiencing an inventory shortage of homes for sale. This is resulting in homes being sought after by more than one buyer. Well priced homes are being bid up, leaving many buyers in a lurch because there is only One Winner!
If you are wanting to be that One Winner on the house buying bidding war, there are somethings you can do to increase your odds of winning.
Preparation is the key. Buying a home isn’t like shopping for a retail product. You can’t just walk into a store, open your wallet, pay and leave the store with your new home! Well that isn’t possible unless you are independently wealthy and have oodles of cash!
Preparation before even starting to look at homes requires a few steps. First find a good agent to act on your behalf. This is an agent who will work as your “buyer’s agent” or “buyer broker,” both terms mean the same thing. Using an agent to represent your best interests is your first step into positioning yourself for success. Oddly enough some buyers don’t realize this. They see a home they like and call the number on the sign. This is akin to calling “the enemy!” When you have the “listing agent” who’s name in on that sign show you the property, they by law are working on behalf of the seller who hired them. Right away you dilute your negotiation power to zilch!
So first find a buyer’s agent who knows their stuff. They should be experienced in explaining the home buying process to you as well as adept at negotiation strategies and be able to write a Colorado contract with ease. In other words, finding you a house should not be their first Rodeo!
Jump to Begin Your Home Search here!
Finding a Buyer’s Agent to Represent YOU!
So first find a buyer’s agent who knows their stuff. They should be experienced in explaining the home buying process to you as well as adept at negotiation strategies and be able to write a Colorado contract with ease. In other words, finding you a house should not be their First Rodeo!
By finding and hiring your buyer’s agent, you strengthen your position immediately because this agent, by law must act on your behalf. Typically buyer’s agents do not cost you the buyer any more, in fact in Metro Denver most listing agents offer to pay the buyer agents who bring the buyer, so having a buyer’s agent will cost you nothing extra!
The next step is to have a consultation with your buyer agent to determine your needs, discuss the home buying process, timing and most importantly acquire the names of a few good lenders. Buyer agents work with lenders day in and out, so we know who is truthful, efficient and can get the job done! This aspect of buying a house is so often over looked. Many buyers feel the need to respond to radio ads, go online to find the best deal on the interest rate, but don’t realize they are jeopardizing their future by trusting in the unknown. Like any other business the people who know how to get things done are the ones who are in the business! Most buyers don’t buy a home every month or every year. So relying on the professional who does is a wise course of action.
I will write more on this later this week, but the point is work with a tried and true local lender for best results.
Timing is everything!
Since the mortgage documentation process takes 4-6 weeks, you should start this process well before your home search begins. So many times people wait until they find The House and then visit the mortgage lender only to find there are “issues” with credit or timing that won’t work. Sadly these people learn the hard way, but losing The House because they weren’t prepared. Don’t risk being disappointed, get the loan process started and in place before opening that first door!
Tips for Getting Your Offer Accepted
Getting your offer accepted is mostly about having your offer stand out above the others. Sometimes that means your offer is the highest and best, but other times that isn’t the most important thing to the seller.
When a seller has more than one offer to choose from, they are going to consider all the factors. They will choose the offer based on what is MOST IMPORTANT to THEM. Knowing what that is, would be helpful, but seldom do they share that information with us.
What we can do is prepare an offer that is as perfect as Apple Pie to the seller.
The Best Offer May Have MANY of these Features:
1a) Loan with significant down payment 20% or more
1b) Any other kind of loan accompanied by strong pre-approval letter from recognized local lender.
2) Quick Close (30 days or less)
3) No contingencies
4) Best price & No Concessions to the Seller
5) No requests for non-included personal property
6 Increased earnest money presented with contract
7) Specific Performance over Liquidated Damages
8) Pre-approval letter from a recognized lender including confirmation of credit examination, job verification and cash on hand (not a pre-qual letter which is worthless!)
9) Professionally written contract, preferably using CTM digital contract.
10) Include an Escalation Clause in the case of multiple offers
11) A buyer’s agent who communicates your needs accurately and in a timely manner.
As a consumer you are in control of some but not all of these things. Your first consideration should be choosing an agent who is well versed in all of the above, including negotiation strategies and tactics. Most likely it is not possible to structure your offer if you don’t have all cash, but you certainly can compensate in other areas by strongly demonstrating your good intent to purchase the home.
Over the next week, I will be elaborating on each of these offer features, illustrating why they are important and how they will help you achieve success. Please subscribe to my blog if you don’t want to miss the series.
If you are just starting the home buying process and are in need of an experienced buyer broker, pick up the phone and give me a call. I work hard to make sure my clients are the ONE WINNER!
Begin Your Home Search here!