How to Compete in a Seller’s Market?
In most areas of our country, the real estate industry is seeing a marketplace leaning heavily toward a seller’s market. Low inventory, high competition among buyers, rising prices, and little wiggle room with regard to inspection demands and contingencies are commonplace, all evidence of a seller’s market that’s making things extremely tough for buyers. Buyers in the most popular price ranges of their respective markets (usually entry level and move up) have it especially tough, often encountering multiple offer situations, demands for “highest and best”, and bidding wars taking place just to get a place to call home under contract.
With regard to ‘highest and best’ demands, the price point is going to be pretty straightforward – pay more, it’s likely yours. Pay more while making other concessions (no contingencies, no inspection demands beyond a certain dollar amount, quick closing, etc), and the offer gets even stronger. This leaves the question of “best” – what makes an offer the best offer? Is it cash? Considering cash buyers have no mortgage contingencies and can close very quickly, seller’s seem to favor these offers. Even cash buyers, though, come with a set of headaches. Since they don’t need a mortgage and usually have a “Cash is king” mentality, meaning they may take issue with appraisal findings, have inspection demands that go above and beyond what many sellers deem reasonable, or have other demands and expectations that financed buyers do not.
For buyers looking to purchase their dream home in a heavy seller’s market, the JMLoans team at Mason McDuffie Mortgage has created a solution to make a buyer’s offer stand out as “best” amongst the competition, even if that competition is cash. We’ve named it, aptly, “Buyer’s Best”.
With our Buyer’s Best program, home buyers go through the mortgage underwriting process before they find a home. All of their income, asset, and credit documentation is gathered and reviewed by an underwriter, and a full underwriting approval is issued with a ‘TBD’ property listed. Once our Buyer’s Best clients find a home, all that’s left to do is the appraisal & title work. This shortens the turnaround time on the buying process, removes the need for a mortgage contingency, and gives buyers the same level of strength as a cash offer. Under Buyer’s Best, as soon as a property is found and put under contract, the process to wrap things up and fund is less than 2 weeks (dependent, of course, on a clean and quick appraisal and title report being received).
For Realtors, this is a way to ensure your clients are in the very best position when buying a home, and sellers can rest assured that buyers using Buyer’s Best won’t cause any delays in financing. All of the worries normally associated with financed buyers are assuaged, and therefore a financed offer is truly stronger than others with standard mortgage “pre-approvals” or even worse, “prequalifications”. Ahead of what’s expected to be a busy Spring season, Buyer’s Best could be the difference between getting the keys to a dream home and missing out because of multiple bid situations. To help further, the loan officers on my team will call the listing agent upon an offer going in to explain the Buyer’s Best program and inform the agent that the steps we’ve taken make your offer (even if not highest) the very best amongst financed offers in terms of strength and possibility of closing with no issues or hassles from a seller.
Questions about Buyer’s Best, or any of our other programs designed to help home buyers and real estate agents? Give me a call at 484-680-4852 or get an immediate answer by asking an expert here.