Of the many advantages of spring, one is that home buyers are out in droves.
If you’ve put your home on the market, lucky you! If you’re the buyer, you might be in for some competition, but it’s easy to get the upper hand when you’re negotiating in a multiple-offer situation.
Planning ahead, knowing your limits and having a crackerjack real estate agent (me!) puts you in the best position for a property win.
1. Limit your liability
Make sure you have your financing in place BEFORE you start looking for a new home. Know what you can afford and make sure the bank agrees. You’d think this was a no-brainer, but you’d be surprised how often buyers are unprepared and think everything will fall into place. Don’t enter into a multiple-offer situation if you don’t even know what your budget is. And that budget has to include the work you may need to do AFTER you win a bid on a property.
2. Maximum purchase price
You need to know your point of retreat before you get into the heat of battle. What is this property worth and what is the absolute most you are willing to pay for it? Have this price fixed and firm in your mind and with your agent, and don’t waver. It is easy to get caught up in the heat of the moment and you don’t want to be the one who bids too much. This isn’t an online auction for an antique fluffy bunny — it’s a serious competition for a serious investment, with staggering consequences if you breach the financial ceiling you set for yourself.
3. Home inspection
If at all possible, do a property inspection in advance of your offer. This way you know exactly what repairs the property may need and you can have one less clause on your offer. It also helps you factor the potential future costs into your budget limit for any bids you put in. Also, if you meet the sellers at the same time as an inspection, that might also give you a leg up if it comes down to an emotional choice between similar deals. Generally business is business, but a personal connection can’t hurt.
4. Be Sherlock Holmes
No, not for the cool hat — get your real estate agent to snoop for any snippet of information they can from the listing agent. Dig deep. The more you know about the property, about your competition and about the other offers, the more prepared you are to go into battle if you find the right home. Information is the sword you need to wield.