If you are in the market to buy a new home and you are under the $400,000 or so price range in the Raleigh, NC area you have more than likely heard the news about how tough it is to buy a home due to the competition. The competition, of course, is other buyers.
Inventory is the issue. We now have record low inventory levels in Raleigh, NC and surrounding communities. This is not only a local issue, the national housing market is seeing inventory issues as well, even though certain areas may have different levels of value, they are all for the most part seeing a dip in available properties for sale.
When your buyer’s agent tells you that the property has multiple offers, the listing agent is likely going to notify all buyer’s agents that submitted an offer and tell them to bring their “highest and best”. For example, if the property is listed at $200,000, you may want to offer $210,000 to beat the competition. That doesn’t mean you will get the house though; and that is the point of this blog post……….
There is a lot of chatter between Real Estate Agents these days about how tough it is out there to get a buyer under contract. What I am hearing a lot of these days is instead of asking agents to bring their “highest and best” offer, it should just be called “best”. The reason being is your highest offer may not necessarily mean your best offer. By that, I mean there are several parts of the offer that could sway a seller one way or the other. Here is an example.
Offer 1 for a house listed at $200,000 has an offer price of $210,000, due diligence fee of $250, is putting 10% down for a loan and a 6 week close date. Offer 2 has an offer price of $198,000, due diligence fee of $2,000, is a cash deal and will close in 3 weeks. A seller may be more willing to accept $10,000 less on their house because there may be less risk with the lower offer. On the flip side, you may have a cash offer like the one above, but another offer may have included a letter to the seller from the buyer saying how the house reminds them of the home they grew up in, etc, etc, and this may pull on the heartstrings of the seller.
There are many different scenarios and parts of the offer that could make a seller go one way or the other, but in general one should know that in a tight market you may be up against multiple offers and you should have the conversation with your agent on the best approach to try to win the bidding war.
When making an offer on a property in North Carolina there are 7 parts to the offer to pay attention to the most, though all parts of the contract need to be understood prior to submitting.
-Due Diligence Fee Amount
-Earnest Money Amount
-Due Diligence Date
-Any personal property or closing costs paid by seller
-Any additional addenda attached to offer such as a Contingency to sell their current home.
As mentioned above, there are unlimited scenarios on how an offer may be considered by a seller, but be sure to make it your BEST offer.