In the seller’s market that Nevada — and much of the country — is currently experiencing, it takes strategy to purchase a home. That means getting preapproved before you start shopping, so you know exactly how much house you can afford. Just as importantly, it tells the seller that you’re a serious buyer.
“In this market, it’s not about getting a deal, it’s about getting a house,” says Aldo Martinez, president of Las Vegas REALTORS®. “Buyers have to be versatile and ready to go.”
In any competitive market, there will likely be many offers on a home, usually within hours of it being listed. This makes it critical to ensure your offer is solid and well thought-out, as you may not get a second chance to make a counter offer on that same house.
Here are some tips for making your offer more competitive:
- Establish a relationship with selling agent: “Every seller is unique and the opening dialogue with the seller’s agent is critical in getting your offer accepted,” Martinez says. “You need to establish rapport with the listing agent to find out what’s important to the seller.” Martinez says it might be that the seller needs to occupy the property after close of escrow or that they prefer a quick close so they don’t lose out on another home they’re hoping to buy. The offer should try to accommodate the seller’s needs as much as possible.
- Make a clean offer: In past markets, buyers could include contingencies in their offer — something the seller had to do for the offer to go through. In this market, the seller most likely won’t need to accommodate contingencies, like waiting for you to sell your house or make improvements. Instead, they’ll likely move on to the next offer on their list.
- Be prepared to offer above appraisal: If you want a home, you will likely need to pay more than the appraised amount in our competitive market. Appraisers are looking at the history of the neighborhood when they establish the value that most mortgage brokers will lend. History doesn’t matter in a market like this, and most homes will sell for higher than appraised value. “We need to make sure our buyers have the money to come up with the difference,” Martinez says. The Nevada Housing Division Home Is Possible down payment assistance program could help with this. If you qualify, the money can be used for your down payment and closing costs, allowing you to use your savings to pay the difference between the appraised amount and the asking price.
- Pay seller’s closing costs or offer other concessions: Paying above asking price (or appraisal) could mean paying the seller’s closing costs. “This will be more attractive to the seller because it’s real money regardless of where the appraisal comes in,” Martinez says. He says to look for other costs associated with the sale that are not affected by the appraisal. “If the agent listed the property at market price, then an offer with buyer concessions would be more attractive to the seller,” he says.
- Offer more earnest money: Earnest money is the check you write to let the seller know you’re, well, earnest, about buying their home. The seller’s agent will share the minimum amount you’ll need to put down, and sometimes offering more will get their attention. This money is refundable in the event you don’t enter into contract to buy the home.
Related: Navigating A Seller’s Market
“The buyer needs to come in fully approved (not just prequalified), with the only missing piece being the house and the appraisal,” Martinez adds. “Include some of the ideas listed above and you’re destined to be one of the few buyers in this market making it to the closing table.”
When you’re ready to make the move into a home of your own, you’ll want a HIP-qualified lender and real estate agent on your side. Though it is more of a challenge than it has been, home is still possible.