Competition Seems to be the Name of the Game
October 19, 2009
As the deadline for the government's first time home buyer's tax credit nears, the competition for purchasing a home has increased. All year long, as lenders but repossessed homes on the market at prices that seemed lower than similar properties, multiple offers became the name of the game. Anecdotally, I have heard of a property receiving as many as 80 offers. I suspect that this number is an exaggeration, but having 8 or 10 offers is a real situation.
Again, anecdotally, I have heard of a buyer submitting an offer on at least 10 different properties and still not being the winning offer. Frustration is high for these unsuccessful buyers as the tax credit deadline looms.
As a buyer, you need to be aware that your offer may be in competition with other offers. This means that it is important to decide how much you want to purchase the property as you may not have a second chance to change your offer.
Banks may come back with a counter offer asking for your "highest and best" offer. They might also come back with a counter offer to multiple offers with a price greater than the list price. Or they may choose one of the offers that was submitted. All of these strategies are possible.
There is really no way to know how to make an offer the winning offer. I have heard that convention wins or FHA and cash may win over any other offer. Investors are definitely taking advantage of the great prices and are in the pool of competitors.
There are many good properties for sale. Buyers who understand the parameters of the present market may be more successful in the purchase of a home.
Be pre approved. That means your credit has been checked, your income has been checked and your down payment verified. Have your past 2 years tax returns ready to submit. Write your offer with the shortest length of escrow time that your agent and lender thinks can be achieved.
Know that you will not be "stealing" a property, but you will be paying a fair price that willing buyers and willing sellers have set.
As the deadline for the government's first time home buyer's tax credit nears, the competition for purchasing a home has increased. All year long, as lenders but repossessed homes on the market at prices that seemed lower than similar properties, multiple offers became the name of the game. Anecdotally, I have heard of a property receiving as many as 80 offers. I suspect that this number is an exaggeration, but having 8 or 10 offers is a real situation.
Again, anecdotally, I have heard of a buyer submitting an offer on at least 10 different properties and still not being the winning offer. Frustration is high for these unsuccessful buyers as the tax credit deadline looms.
As a buyer, you need to be aware that your offer may be in competition with other offers. This means that it is important to decide how much you want to purchase the property as you may not have a second chance to change your offer.
Banks may come back with a counter offer asking for your "highest and best" offer. They might also come back with a counter offer to multiple offers with a price greater than the list price. Or they may choose one of the offers that was submitted. All of these strategies are possible.
There is really no way to know how to make an offer the winning offer. I have heard that convention wins or FHA and cash may win over any other offer. Investors are definitely taking advantage of the great prices and are in the pool of competitors.
There are many good properties for sale. Buyers who understand the parameters of the present market may be more successful in the purchase of a home.
Be pre approved. That means your credit has been checked, your income has been checked and your down payment verified. Have your past 2 years tax returns ready to submit. Write your offer with the shortest length of escrow time that your agent and lender thinks can be achieved.
Know that you will not be "stealing" a property, but you will be paying a fair price that willing buyers and willing sellers have set.
posted by shirley harry at 8:44 AM
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