After experiencing a record-breaking 2020, there seems to be no slowing down for residential real estate this year. This frenzy of activity has led to low inventory, bidding wars and fierce competition in markets across the country.
As economists predict another record-breaking year, here are five tips for agents to help buyers compete and guide them through this competitive market.
Go beyond a pre-approval letter
In this highly landscape, one of my first steps while working with clients is to ensure their financials are secure from the very beginning. As many know, a pre-approval from a financial institution is just a preliminary step in the homebuying process.
I recommend having your clients go that extra length to showcase the strength of financials and that they are serious buyers. Walk your clients as far as they can go in the underwriting process with their lender so that they have the best possible chance of standing out against the competition. It will also help ensure your clients will be closing on their investment on time.
Another step I highly recommend to go over with clients early on is listing out their top priorities and must-haves. As their real estate agent, it’s your responsibility to narrow down this list to aid in a strategic and realistic home search based on budget and priorities.
Remind your clients that the dated floors or wallpaper can all be updated. Stay focused on the items that matter and are on their initial list.
As you tour through potential properties, whether in person or virtually, point out the floor plan, location, noise from the street, the neighborhood — all things that are permanent and crucial to consider.
With these priorities in mind, you can better guide your client to make compromises when they have to and find the right property for their family.
In many markets across the country, inventory is extremely slim. Homes in desirable neighborhoods or near a top school district don’t typically stay on the market very long. With this in mind, it’s essential to get your clients ready to act quickly when a home in their desired area comes on the market.
One way to do this is to gather as much information as possible on the property in advance and get in touch with the agent representing the sellers to set up a tour right away.
Inform your clients of any upcoming open houses (if allowed in your area right now due to COVID) and upcoming availability for private tours, or call to go over all their questions and quickly assess if this is a potential home for them.
Write a strong offer
Once your clients have identified the right property, they should be prepared to make a solid offer. Depending on the market and price point, they should act quickly. Real estate professionals should help map out a strategy for their clients based on the local market conditions, the likely competition and other factors that might impact their offer.
In a multiple-offer situation, have your clients plan on making their best offer from the very start. In today’s competitive market, don’t count on getting a counteroffer.
Consider the terms within the offer
Although sales price is, of course, critical, inform your clients of other terms and conditions that could be a deal-breaker. Assess items, such as the scheduled closing date or due diligence timing, that can make offers more appealing than others.
You must write a firm offer to compete in today’s housing market. Keep in mind that it’s not just about price. Other terms and conditions that sellers might deem more important to them might give you the edge (closing date, earnest money deposit, appliances, due diligence timing). Don’t count on getting a counteroffer in a multiple-offer situation, so plan on making your best offer from the start.
It can feel overwhelming for those searching for their dream property in a tight market with high demand and low inventory. Now is the time for real estate professionals to guide clients through any feelings of discouragement and navigate their search in an informed and prepared manner. By preparing in advance, your clients will be ready to make the moves necessary to secure their desired property.