Answer is simple there are not enough homes for sale to handle the recent explosion of buyers onto the market. Mortgage Investors Group Loan Officers are being told by customers and agents that multiple contracts on homes are occurring within a very short period of time of one another. Also, market data is revealing that the percentage of sales price to list price are increasing. Typically markets trend to run about 92% to 95%, but some markets across the country are seeing percentages in excess of 98% with some areas over 100%. In Tennessee, Nashville-Davidson-Murfreesboro-Franklin are at or near the 98% range as far as the ratio of sale prices to list price, putting them in the number one ranked position in the Core Based Statistical Area for May. Nashville area is presently considered one of the most affordable markets in the United Stated and one of the best places to get a job.
These are great signs for our economy, but these conditions create challenges for all parties. There are things you can do to prepare for the bidding war:
They will be able to alert you with the latest homes that hit the listing market. Timing is everything, and fast reaction increases your chances to submit a winning bid. Plus a Realtor knows the art of negotiation and all the complexities that are involved in a transaction. Don’t go it alone.
The Realtor will insist you get pre-approved but make sure you keep the LO updated on all your financial changes. Good piece of advice don’t do anything that will affect your credit during the process. That ‘must have’ car, TV or whatever, can wait. No one like surprises, focus on one thing, finding that perfect house and winning the bid.
3. Keep the offers simple and sale conditions to a minimum.
Remember, the bidding war is due to more buyers than sellers. You are going to have to offer more than the list price. Also, the less complicated the offer the more likely the contract will be considered by the seller. Too many demands may put you at a significant disadvantage. Listen to your agent; don’t try to get creative, keep it simple.
4. Earnest Money Deposit.
Follow the advice of your Realtor, but a large earnest money deposit may have a psychological effect on a seller. Small deposits may not appear sincere or worse it may look like you may not be able to afford the home. If this is the house of your dreams, don’t be afraid of stepping up that deposit.
5. If your bid gets rejected act fast.
You may have thought your offer was perfect, but things happen. If your agent calls you late at night and says you need to re-submit the bid, don’t delay; it may be more convenient to wait until morning, but it also may be too late.
6. Winning or losing.
Winning is the goal but losing is a possibility. Don’t lose heart. Get ready for the next call from your Realtor and start the process all over, you will eventually win!
Mortgage Investors Group understands there are a lot of choices when it comes to financing the purchase of a new home or refinancing an existing one. Our licensed and experienced loan officers are here to help you gain a better understanding of those options and answer your questions about the loan process, qualifying and the different features of each loan program. We offer everything from conventional mortgages to government loans.
Call us today and let us help you find the best loan that fits your family’s need!