Staying Competitive as a Buyer in a Hot Market

Spring tends to be the hottest season for the real estate market, which means heavy buyer competition, especially while inventory is still recovering. These tips, including some lesser-known ones, can help you stay in the running.

It’s not unusual for homes to be listed low in order to garner interest. While this may not be necessary with higher demand than supply, it’s good to know that you may want to look lower than your expected budget. Even if an offer is accepted near the list price, that just means you have a bit extra for repairs or updates. Alternatively, you could put it towards a higher earnest money deposit, which shows the seller you’re actually serious. Getting an actual approval letter, and not just a pre-approval, will do the same thing.

There are also a few contract terms you can change to appeal more to sellers. A good agent can advise you on matters related to your current situation to see which contract terms are best for you. These include various waivers, particularly an inspection waiver; a lease-back for sellers who are also prospective buyers; and a relatively unknown thing called an escalation clause. An escalation clause, also called an escalator, lets the seller know as soon as they receive your offer that you are willing to increase the offer if outbid, and defines an upper limit. This can prevent a situation in which the seller sees your offer, sees an offer higher than yours, and accepts the higher offer, without realizing that the higher offer is actually lower than what you are willing to pay.

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