LHT – Buyers are still up against fierce competition this spring as the number of available homes hits record lows nationwide.
There are over 1.1 million houses on the market nationwide, a 24% decrease from the months before the epidemic, according to the most recent statistics from the National Association of Realtors (NAR).
Bidding wars are commonplace and selection is sparse in West Orange, a New Jersey neighborhood approximately 30 miles west of New York City. A three-bedroom, 1,200-square-foot house that went on the market for $424,000 this month received an unprecedented seventy-one bids. Montclair, New Jersey, a charming suburb with a plethora of eateries, boutiques, and exciting cultural events like the Montclair Film Festival, is right next door to the house.
Among all West Orange properties sold in the past 12 months, this one had the greatest list price-to-sale ratio at $618,000, which was 46% more than asking.
Heather Kandawire, a real estate agent at Keller Williams NJ Metro Group, who represented the sellers of this home, expressed her belief that many buyers, particularly those from Brooklyn, Jersey City, and the Upper West Side, begin their search in more popular towns such as Montclair, Glen Ridge, and Maplewood, but unfortunately become priced out of those areas.
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Homebuyers are on the hunt for new communities that have all the comforts of the suburbs: spacious yards, safe neighborhoods, excellent public schools, parks, dining options, and easy access to the city via train. The Caldwells, West Orange, Bloomfield, Verona, and Cedar Grove are justifiably receiving increasing media attention.
If you ask Kandawire, sellers in competitive markets are looking for the best overall contract, not just the highest bid. (Here you can find the seller’s guide to Kandawire.)
Her advice for buyers who want their offers to stand out is as follows:
1. Get a solid down payment
A down payment of 20% or more is commonplace in very competitive markets. The buyer will benefit from reduced monthly payments and interest paid during the loan’s lifetime, and the seller will see that the buyer is financially stable, increasing the likelihood of a smooth closure.
2. Use firm words when evaluating
“Waiving the appraisal completely is the strongest language,” Kandawire explains. “If the bank’s appraisal falls short of the offer price, the buyer will be responsible for making up the difference.”
As a result, vendors in her sales area still would rather have buyers assume risk than they do. “Sellers in this market can be picky!” she exclaims.
3. Obtain a preapproval from a trustworthy, nearby lender.
To give yourself an advantage over other buyers, get pre-approved for a loan by a local lender. This will show the seller that your financing is secure and can often speed up the loan process.
4. Close on the date that the seller has specified
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Your offer may be more appealing if it aligns with the seller’s preferred timetable; doing so demonstrates flexibility, reduces the likelihood of delays, and simplifies moving arrangements. An expedited close should be offered when one is uncertain about the timeliness of a seller.
5. Do not qualify for a mortgage by putting a home sale contingent on it
Your chances of having the seller accept your offer on a new house are much lower if you have to sell your current home first.
There will be less chance of the purchase going through and your offer will be more competitive if you don’t have a contingency. This will make you seem like a more reliable buyer.
6. Don’t waste time nitpicking; focus on the big picture when you examine a house
The seller will be more receptive to your seriousness and reasonableness if you limit your inspection to major issues; this will facilitate faster negotiations and a smoother sale.
7. Let a specific amount of money go toward inspection fees
For instance, if you find significant problems during the inspection, you should be prepared to pay the initial $5,000.
As a result, the seller will see that you are dedicated and flexible, which will ease their workload and, in turn, boost your bid.
