Finding Homes for Sale in a Competitive Market

To stand out in a tough market, it’s crucial to be flexible and open-minded. Consider expanding your search to neighboring areas or exploring properties that require minor renovations or updates. By broadening your criteria, you can increase your chances of finding hidden gems that might have been overlooked by other buyers. Additionally, consider making a competitive offer by offering a higher down payment or being flexible with the closing date.  We typically see these types off additional offers when in competitive bidding situations:

•  ESCALATION CLAUSE OFFERS – offering a starting price along with an offer to go a certain amount ($2000 or $3,000) over the next highest bidder up to your max offer price.  If there are multiple buyers we are typically seeing agents ask for the “highest and best offer” with a deadline to submit. These are typically closed bid situations meaning nobody knows what the other offer is (unless you win a bid with an escalation clause -then they would show you the next closest offer to prove the amount you won the bid for).
• AS-IS OFFERS – offering to purchase an offer As-Is means you can still do your inspection and still retain the right to back out after the inspection, but you won’t be able to go back to the seller asking for additional fixes or credits for what you may have found.
• RENT BACK OFFERS – if you know the seller is going to need time to find their next home you could offer to do a rent back -meaning you close (aka purchase) on the home and then offer to let the home sellers stay in the house for an extra month or two while they locate their next home.  In highly competitive cases we are actually seeing people offering free rent backs. Meaning the buyer buys the home -then lets the seller rent it back for up to 60 days for free. 
• NO INSPECTION OFFERS – this is one I generally recommend against. Offering to buy a home without doing an inspection is a risky endeavor and there’s a good chance you would win the bid.  Even though sellers are supposed to disclose any known issues in the house via required disclosure documents, they don’t always disclose everything and/or may not be aware of bigger issues occurring in their own home yet.
• APPRAISAL GAP WAIVER OFFERS – if you can afford to purchase a home entirely with cash -no loan, then you will have a leg up on anybody who is needing to get a loan to purchase the property. Most home loans require an appraisal by the lender and there is a higher chance the appraisal may not come in high enough to meet the contracted price (especially in a hot multiple offer situation), in which case the buyer may not be able to qualify for the loan.  One way insure the seller this won’t happen and to be more competitive with other potential cash offers, you could offer an appraisal gap waiver where you promise to cover all or a portion of any amount difference between your agreed on purchase price versus the lower appraisal price.  So if the appraisal comes in $10K less than your agreed upon contract price you would be required to bring more money to the closing table to make it work, (unless you were only offering a $5K gap) in which case you would need to bring $5K additional to the table if the seller was also willing to lower the agreed price by the other half of $10K).  If you agreed to offer a $5,000 appraisal gap that would be the max you would be willing to cover.  If it comes out more that that you could either renegotiate with the seller to see if they will drop it $5K if you come up $5K to cover the difference, or just back out all together at that point.