Buying a home in the Triangle can be difficult; things are crazy out there right now because it is a seller’s market. That means there are more buyers than homes, forcing buyers to pay more than the listing price for their future home. Those who don’t make a substantial offer risk losing out when sellers are faced with a multi-offer situation.
What to Expect
In situations like this, sellers may ask you to go into rounds of negotiations where you have to bet against yourself along with the other buyers bidding on the same house. Real estate agents discourage this because it means bidding on the house a second time without knowing if your original offer was too high or too low. Betting against yourself has two possible outcomes: bidding too low and losing the house or offering too much and getting the house — but overpaying.
Overpaying for a house may get you the house you want, but there is a chance that the home will not appraise. If you depend on a loan to close the deal, you will need an appraisal from the bank, which is hard when the house was sold for much more than the listing price.
Appraisals are based on sale prices of similar homes that have already been sold, known as comparable sales. Without an appraisal, you will most likely have to pay the difference or cancel the transaction. Do not worry; even with this challenging housing market, smart sellers will not accept an offer that is too high to appraise, unless the seller is reassured that the buyer will close the deal regardless of the appraisal.
Buy When Ready
Overall, the supply of houses cannot keep up with the demand even outside of the Triangle area. Interest rates are rising, so it looks like the sooner you buy a house, the better. Do not feel pressured, but be aware that it is more common to have multiple bids and faster sales in this highly competitive market. Remember: as competition rises, so do prices. Try not to bet against yourself when buying a house.
Here are more useful tips on buying a house:
- Come in strong up front. Make a large deposit and a large down payment. This bold move shows the seller that the buyer has serious intentions.
- Do not get caught up in a bidding war. As stated above, make sure you are comfortable with your offer and do not overbid.
- Get in backup position. If you have offered your highest price and it isn’t accepted, the seller may give you the backup position, which means you are still a top contender. IF the deal with the first buyer falls through, you are at the top of the list to get the property at your final terms.
- Have as few contingencies as possible. Waiving or not including as many contingencies can make your offer unique and more attractive to the seller.
- Explore various types of financing. The financing the prospective buyer obtains can influence the seller’s decision in a multi-offer situation.
- Work with the seller. Learn about the seller’s plans. For example, if they want an extended escrow because their new home will not be ready, work with the seller and give them more time.
- Stay positive! Do not get overwhelmed; it can take a few times to win in a multi-offer situation.
Weaver’s Pond in Zebulon, North Carolina has homes available direct from well-respected builders. Contact us to build your custom home!
