Austin Texas Real Estate Blog

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How to Win as a Buyer in a Seller's Market

Over the past couple of years, I would estimate that 60-70% of the deals I've handled have involved multiple offers. If a home is priced correctly, it will sell. Even though we're in a seasonally slow time of year, the last two offers I wrote for buyer clients were turned down, even though both of them were above full price. 

If you're a buyer in a strong seller's market, it's important to "bring your A game" when it's time to make an offer. Using a hypothetical situation, if a home is priced at $395,000, and you think you may end up competing with another buyer, you are probably wasting your time bringing an offer less than $400,000, perhaps even $5,000 or more above that.

Think hard about how it might feel to lose a house by a relatively small amount, particularly when rates remain very low and a few thousand dollars won't impact your monthly payment by much at all. Obviously, there's a limit to this line of thinking, but it helps to put things in perspective with your purchase. If you bump your offer up, it's best to have the mindset that you barely won.  :)

But beyond the obvious, here are some considerations to help you gain some leverage, particularly if the offers are close:

        1. Down payment matters. In the absence of multiple offers, this probably isn't a big deal, but when           there are others in the mix, an offer with 3.5% down pales in comparison to one with 20% down.

2. Timing. In Texas, we have option periods as part of our contracts. This enables the buyer to have the unrestricted right to terminate the contract within a negotiable amount of time for a nominal fee. Consider going in with a short option period if possible. The most typical time period is 10 days. Cut this to 5 if you can.

3. Closing costs. One successful strategy I've seen involves moving "typical" seller expenses to the buyer's side in an initial offer (e.g. the title policy). This increases the net amount due to the seller without any additional concerns about whether or not the property will appraise at a higher price.

4. Choose a good agent in the first place. If all other factors are equal, you will definitely increase the chances of having your offer accepted if you have an agent who knows what he/she is doing. Experience and finesse can help.

5. Write a personal note to the seller. This won't help if your offer is way off the mark, but I've seen it help in situations when the offers are all close to each other. List a few personal details and tell the seller why you love the house. It can't hurt.

 

I hope you've found this list to be helpful. If you're looking to buy (or sell) a home in the general Austin metro area, I would love the opportunity to earn your trust and your business. Feel free to call, text, or email me anytime. I can be reached at 512-796-7653 (cell) or jason@austintexashomes.com

Thanks for reading!

 Image credit: https://www.flickr.com/photos/23065375@N05 

 

If you're looking for a home in the Austin area, you can also visit my primary website at www.austintexashomes.com.  Thanks!

Comment balloon 11 commentsJason Crouch • November 16 2014 06:51PM

Comments

Hi Jason, that's great advice for a buyer in a seller's market.

Posted by Sybil Campbell, REALTOR® ABR, SFR, SRES Williamsburg, Virginia (Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia) over 2 years ago

Great advice for those buying!  thanks for sharing.

Posted by Graziella Bruner, Broker/Owner - Serving Wayne & Oakland County (BRUNER REALTY LLC) over 2 years ago

Excellent advice to buyers especially #4. A good agent will guide the buyer in making the best offer possible while keeping the buyer's interest paramount.

Posted by Kate Elim, Realtor 540-226-1964, Selling Homes & Land a (Dockside Realty) over 2 years ago

I have had a few instances where the agent chose my buyer's offer when all else was equal - because they knew I was  a professional they wanted to work with.

Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) over 2 years ago

You've made me curious... why might a typical seller closing cost be?  In GA sellers only pay commission and pro-rated taxes per the contract and beyond that any negotiated buyer contribution.

Posted by Tammy Lankford,, Broker GA Lake Sinclair/Eatonton/Milledgeville (Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668) over 2 years ago

Some buyers want to test the market. When they do, they risk not getting the house.

Posted by Tammie White, Franklin Homes Realty LLC, Franklin TN ((615) 495-0752 or www.FranklinHomesRealty.com) over 2 years ago

A great focus on how to win multiple offers in Austin, Jason. I have no doubt that you know how to navigate this with your buyers!

Posted by Loreena and Michael Yeo, Real Estate Agents (3:16 team REALTY ~ Locally-owned Frisco TX Real Estate Co.) over 2 years ago

I haven't heard of offering to pay for seller's closing costs!  In our insane market no one has done that to my knowledge. Here sellers have a grantor's tax that's a pretty sizable chunk, as well as attorney fees for deed prep, loan payoffs etc.  That's a great idea.

Posted by Coral Gundlach (Century 21 Redwood Realty, Arlington Virginia) over 2 years ago

Jason good advice nice to see you resurface in the Rain, periodically I see you re-appear and then fade any special reason??Endre

Posted by Endre Barath, Jr., Realtor - Los Angeles Home Sales 310.486.1002 (Berkshire Hathaway HomeServices) over 2 years ago

Endre Barath, Jr. - I fall in and out of the habit of blogging. This year, I was simply very busy.  :)

Posted by Jason Crouch, Broker - Austin Texas Real Estate (512-796-7653) (Austin Texas Homes, LLC) over 2 years ago

Some great food for thought when working with a buyer...

Posted by Sharon Harris, Realtor (Keller Williams Keystone Realty) about 2 years ago

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