Tuesday, March 9, 2021 / by Teresa Dipeso
Instead of waiting for the market to slow down, follow these 10 steps and be in position to win now and benefit from historically low interest rates.
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1. Be aware of how competitive the market is. Homes at the Jersey Shore are selling quickly, with some towns seeing days on market cut in half or more. Buyers are eager to lock in a low rate, and inventory is limited. Know the state of the market, but don't be intimidated by it. Know what you're willing to spend and be prepared to move on a home you like.
2. Get pre-qualified. Before anything else, even before you look at more great listings, talk to a lender. This process is simple and quick, and not the mountain of red-tape you might imagine. Sellers will need your pre-qualification with any offer, and if you find the home of your dreams but don't have it ready to go, you'll really wish you had!
3. Be ready to make an offer. You've got your pre-qual, you've toured a home you love, now what? While we might all prefer to be able to sleep on it for a few nights, not in this market. If you view homes in person, you should be ready to pull the trigger.
4. Be flexible on the terms. Everyone likes to feel like they're getting a deal, no doubt about it. But, in this market, it's not the time to try to get everything you want. See the big picture, and how getting into the market now versus later will save you tens of thousands longterm. The buyers who win in this market are typically the more flexible: few to zero contingencies, quick closing, waiving attorney review, etc.
5. Be aggressive with your escalation clause. Many properties right now have multiple offers, and since you can't know what the other buyer has offered, you might want to use an assertive escalation clause. For example, instead of saying you will offer up to $400,000 with an original offer of $390,000, you probably won't win out. Instead, offer $X above the highest offer.
6. Be quick to close. For most sellers, the most attractive thing besides a cash offer is a quick closing. Set the soonest possible date that you and your lender can close. With virtual closings, you don't even have to be in the same state! Currently the standard closing is 30 days.
7. Be aware of time. When making an offer on a home, you probably want to get as much info as humanly possible. That's natural, and a good thing. However, you don't have to wait to get it all before you make an offer. If it's going to take a couple of days to get the rental history, for example, just make your offer with a clause that the contract is contingent on getting the documents. This happens nearly with every contract, especially involving HOA's, so use it to your advantage!
8. Be knowledgeable about prices. In a typical market at the Shore, you might use sold comps (similar homes that have sold) going back 6 months. Not in this market. Homes are selling so quickly that real-time values update much more quickly than years past. You may want a home to be what it was worth in January, but that's just not what the market is dictating. Be receptive to data.
9. Be prepared with a backup (or two). Let's face it: you could do everything right and still not get an accepted offer on your first choice. It happens. So, have a second and even third backup offer prepared. It only takes a minute to put together and you're under no obligations with merely prepared offers.
10. Be confident and bold. With so much competition, many buyers are unfortunately putting their search on hold, waiting for the market to slow down. They may be waiting a long, long time. Bottom line is, if you're prepared and knowledgeable, and have an expert agent and team at your back, you can put the competition out of your mind and go find that dream Shore home!