What to Do When You've Been Outbid for Another Home
It's no secret the real estate market is super hot right now and the demand for homes is high. There are more buyers than homes available for sale. In fact, according to an article on Realtor.com, the national inventory of active listings declined by 53% over last year. Buyers are finding themselves in multiple offer situations which means many are being outbid for homes, often more than once. If you've been outbid for another home, keep your head up. Here are few ideas your real estate agent might have up her sleeve to help you.
It's All About the Sellers
It's a super sizzling seller's market right now and home values are rising. Sellers are in charge and if you're trying to buy a home, keep this in mind. Buyers don't have much negotiating strength in this market so expect to make an offer above list price on a home. Of course, have your real estate agent look at the comparable sales prices to be sure your offer isn't out of the ballpark as it will need to appraise. According to an article on Redfin.com, home prices nationwide were up 22.2% in April.
Have your agent ask the seller's agent what closing date the sellers are looking for, and write that in your offer. Don't ask for any more personal property than is being offered. Don't ask for a warranty, as you can purchase one yourself later. Be prepared to purchase the home "as is." You can still have a home inspection done to make sure there aren't too many defects or safety hazards in the home.
Talk to Your Mortgage Lender
You may have to talk to your lender about what you can do to decrease your chances of being outbid for another home. You may have to increase your budget and go up in price range. If you can afford a home that's $10,000 higher, more listings may be available to choose from. Many buyers are losing out because they aren't obtaining a conventional loan. Sellers are looking for buyers who are financially strong and able to put down 20% or more. Keep in mind, many homes are being sold to cash buyers as well.
Expand Your Search Area
You may have to expand your search area to different neighborhoods or a different part of town. It's not the best time to be picky right now. For example, if you want to be within a certain driving distance to work, you may have to consider expanding your search and adding another ten minutes to your drive.
Change Your Search Criteria
You may also have to change your search criteria. The more search criteria you have, the fewer homes will be available for you to choose from. For example, if your agent is searching for a four bedroom home with a fenced yard for your dog, you may have to settle for a home without a fence. You can always build one later.
Wait Until the Market Balances Out
If you continue to be outbid for homes, you may want to take a step back and wait for the market to balance out a bit more. If you are renting, see if you can renew your lease on a month-to-month basis. This way, if you are finally chosen as the lucky buyer, you can give your landlord a 30-day notice. Also, since home values are going up, if you wait, you may not pay top dollar for a home.
Many buyers are on an emotional roller coaster right now. If you believe in the saying, "Everything happens for a reason", take a breath and know it will come. Sometimes good things happen when you least expect it.