Las Vegas is currently in an extremely strong seller’s market. Thanks to historically low-interest rates and a lack of inventory, sellers find themselves closing quickly and for high prices.
Finding a home you love, making an offer on it, and losing it to another buyer can be frustrating.
As a buyer, how do you stack the cards in your favor?
Educate Yourself
Become familiar with comparable sales prices and expect to pay market value – or higher. Yes, there are occasionally “deals” out there. However, in many Las Vegas communities, the average sales price is more than 100% list price. That can be because the seller priced the home below market value to create a bidding war. Other times, buyer interest drove the price above what other homes have been selling for. We’re now in an “appreciating market,” and prices are going up, and you need to structure your offer accordingly.
Have Your Pre-Approval In Hand
Get pre-approved (NOT pre-qualified) with a reputable direct lender, preferably with a loan officer who works in the area you’re looking in. Pre-approval requires submitting your bank statements, tax returns, and paycheck stubs. However, it’s far more powerful to have that than a simple pre-qualification. Most sellers will not even look at your offer without it. Furthermore, due to Coronavirus restrictions, you can’t even see homes on the market before you have your pre-approval.
Also, know that you may have to get cross-qualified or cross-approved with another lender before a particular seller will consider your offer. Keep your paperwork handy in case you need to do this. Don’t take it personally if you’re asked to do so. The seller and listing agent don’t know you or your lender, and they want a second opinion from someone they trust.
Don’t Ask For Credit
Please don’t ask the seller to credit you for closing costs unless you really need them. Remember, this is a seller’s market, and the seller is the one in the driver’s seat, so you don’t want to ask too much of them. Furthermore, you may be competing against other buyers who don’t need that credit. All other things being equal, the sellers would probably prefer the offer that doesn’t ask for closing costs credits, especially if the other offer’s bottom line is the same as your offer price.
If you need credit for closing costs, consider seeing if your lender can structure your loan with a lender credit. Or, reach out to family members who may be able to “gift” you funds to cover your closing costs.
Make A Strong Earnest Money Offer
When you make your offer, you’ll also offer an “earnest money” or “good faith deposit.” If it’s too low, the seller may not think it shows much “good faith.” Sellers like to see that buyers have “skin in the game.” Good faith deposits are typically 1 to 3 percent of the sales price.
Act Quickly
Time is of the essence. Act quickly if you see a home you like. In a strong seller’s market, homes don’t last on the market very long. If you fall in love with a home, chances are another potential buyer (or two or three) did too. Make sure purchasing this home is right for you, but act fast. Your real estate agent will be able to help you quickly consider the pros and cons of particular homes.
Another way to sweeten the deal is to shorten contingency periods. If you feel comfortable shortening any of them, do so. Sellers like to know that there’s a shorter period of uncertainty before you’re committed to moving forward.
Appeal To The Sellers
Have your agent explore what’s important to the sellers. What timing are they looking for? What appliances do they plan to include or exclude? Will they need any additional occupancy time after escrow closes? Will they agree to provide termite clearance or a home warranty? The closer your offer is to something the seller can accept, the better it will be received.
If the seller is a “regular” seller rather than a bank or institutional investor, consider including a personal letter with your offer. Use this letter to tell the sellers a little about yourself and why you like the home. Letters can make a difference, helping you stand out from other buyers.
Use A Local Agent
Work with a local, reputable agent who has connections within the community. Oftentimes the seller’s agent will give strong consideration to slightly lower offers when presented by reputable agents who are responsive, punctual, and have a reputation for being accommodative during the transaction process. People like to work with people they know – and ones that call them back.
Be Patient
Be patient and develop thick skin. If your offer isn’t accepted, don’t take it personally. The sellers are simply picking what they think is the best offer. It’s disappointing to be rejected, but it isn’t the only house in the world. Keep trying, keep looking, and keep writing offers. Stay positive.
Need Help Navigating This Strong Seller’s Market?
Marisa Bilkiss can help! When you’re a buyer in a seller’s market as strong as this one, you need an expert’s help. She’d be happy to take some of the stress off of you and help you write competitive offers to get you into your dream home. Give her a call today at 702-410-6555.