Tips to compete in a tough real estate market
The disappointment of losing out on a home you love is something no one should have to deal with, yet most buyers will run into this situation in today’s market.
Agent Arjun Nair from the Brokerage Product team at Flyhomes has studied the details of thousands of winning offers. In 2020, 53% of Flyhomes buyers who won bidding wars won despite not having the highest bid.
How did they do it?
“Certainty is the best thing you can give a seller,” Nair says. “Our buyers win because we focus on eliminating doubt that the deal will go through. We see time and time again that certainty can be more important than a little more money. Many sellers will give up thousands of dollars when they know that their buyer will be able to close quickly and smoothly.”
What are the best tactics to give the seller confidence to accept their offer? Here are the top three strategies agents are using right now to win deals for their clients.
1. Provide financial certainty.
“Pre-approval isn’t enough,” Nair says. “Get underwritten as a first step so you have no doubt about what loan program and the amount you’re going to qualify for. Then, you can pass that certainty on to the seller.”
While underwriting is a more intensive process than pre-approval, it’s empowering to do it early on rather than waiting to underwrite the buyer and property at once. When you shop for a home with an underwriter’s input into their loan qualification, you shop with total confidence in your budget.
2. Make a cash offer backed by a short-term loan.
“You don’t need liquid cash to make a cash offer,” Nair says. “Flyhomes Cash Offer provides a short-term loan that acts as a cash equivalent, closing in as few as eight to ten days. When buyers show up fully funded, sellers have no reason to say no.”
A cash offer allows you to avoid financing and appraisal contingencies, giving the seller even less to worry about. It gives you some welcome room to breathe, too. Once you buy your new home with a short-term loan, you have time to shop around for the best rate to finalize your long-term mortgage.
3. Guarantee your purchase.
“Sellers fear having their deal fall through. If you can guarantee that won’t happen, you’ll have even better chances than with a cash offer alone,” says Nair. “It’s how to beat a cash offer from another buyer. Flyhomes offers a guarantee that we will buy the home in the rare instance that something happens that makes you back out. There’s literally no risk to the seller.”
When you’re already underwritten and able to make a cash-equivalent offer, very few circumstances will prevent you from following through. A guarantee covers those rare instances where something unpredictable happens at the last minute, so the seller still gets to move on.
In 2021, there’s no reason for qualified buyers to struggle to prove themselves or to feel forced to raise their budgets because the next buyer is willing to pay more. These three strategies help buyers get homes they love with less stress so they can focus on what really matters: moving in and enjoying their new home.