3 Tips To Hone Your Offer’s Competitive Edge In Today’s Hot Market
California has one of the most competitive real estate markets in the country due to a continuing housing shortage. A limited supply combined with a high demand creates the perfect recipe for a seller’s market. That is the real estate reality in today’s current market. As a result, buyers are constantly faced with multiple offers and bidding wars.
There are ways to outwit the competition and lock in a winning offer for your dream home. These three tips will help get your California offer accepted amongst the stiff competition.
1. Do your market research
You must understand the market to be taken seriously within it. California has been facing a housing shortage and home inventory continues to remain low. This is due to a few factors:
- The average homeowner tenure has nearly doubled since 2007 from about 4 years to almost 8 years
- Homeowners do not want to sell their properties and give up their low fixed rates
- Homeworkers are afraid they won’t be able to find a replacement home that meets their needs in a competitive market
- Investors own a much larger percentage of homes now and typically hold properties longer than owner-occupants.
All of this contributes to the low inventory and high demand that makes for a competitive market with many people hoping to get an offer accepted in California. Understanding the market will better prepare you for the house-hunting process and give you the confidence to move quickly and lead with your strongest offer.
2. Review recent sale prices in your desired neighborhoods
California’s housing market moves fast. It is unlikely that you’ll have a lot of time to analyze the price of each property you see and debate on it. It’s important to get a feel for what houses in your target areas have been selling for. This not only gives you a guideline for what you should offer on a home, it will also let you know when properties are being over-priced or underpriced to egg on a bidding war.
The more you know before you begin seriously house-hunting, the better prepared you’ll be to make the right offer when you find your dream home.
3. Put your strongest offer up first
In a buyer’s market, you might be able to “lowball” your offer and start negotiations with the seller. In today’s hot market you’ll need to make a strong impression right away with your first offer. Using the research you’ve done on prices for similar homes in the neighborhoods you’re looking at, you can put together a strong and fair offer.
It also doesn’t hurt to add a human touch. Writing a thoughtful and personal letter to the seller can increase your chances of getting your offer accepted. Redfin has some great tips for effectively writing a letter that includes formatting the letter to stand out, telling the sellers what you love about the house, and making personal connections.
Check out this blog for more letter-writing tips and testimonials of how adding a human touch can go a long way in your home buying journey.