If you are considering buying a home in Central Mass in 2017-2018 in and around Spencer, Charlton, Auburn, and Worcester, these 5 techniques to win a home bidding war in a sellers market are a MUST know! Right now we have a drought of inventory of homes for sale on the market in Worcester County . In fact, the numbers of homes for sale have steadily declined since 2011! This has created an abundance of buyers, especially since the mortgage rates are still relatively low.
So what does that mean for you? As a home buyer in Central Mass this means there is some fierce competition for acquiring the home you love!
Right now, when a move in condition Central Mass home comes on the market that is priced fairly, It is common to have 2-6 offers within the first week of it being on the market!!
As a Realtor in Central Mass, working with both sellers and buyers these are 5 techniques that I have used that have proved to be very successful for my buyers, allowing them to secure the home they wanted when 5-10 other buyers were also interested in the same home! I know people expect this type of thing in California or in the city, but in Central Mass? Hard to believe, but yes!
1)BE PREPARED WITH WRITTEN PRE-APPROVAL
Sellers in this Central Mass market will not even consider an offer unless they have documentation proving proof of bank funds or a pre-approval letter that is based on verified income and assets. Now this is fairly easy to accomplish within a day as long as you get some bank statements, tax returns pay stubs and such. Also, using a local Central Mass lender will help your transaction run much more timely, as opposed to a big company that you can find online.
Its a much more personal experience and can make a big difference to get you to the closing table on time! With the big banks with big promises you are just a number. Locally, I work with a lender and can actually TALK with them instead of a recording, which means things GET DONE!
2) RAISE YOUR OFFER PRICE
Every buyer out there understandably wants to get the BEST possible deal available when buying a home! The reality is that in this sellers market we are currently in, not just in Central Mass, but nationwide, that is going to be pretty difficult unfortunately. The Central Mass buyers looking for a deal in 2017 on a move in ready home are the ones walking away losing the home they love to another buyer. I have sadly seen it many times.
It is so deeply ingrained in all of us to see how good of a deal we can get, trying to save as much of our hard earned money as possible, that it’s very difficult to put in an offer at asking price or even worse over asking price no matter how much we love the house. Yet, if you REALLY want a particular Central Mass home in this 2017 bidding war market, that may just be the only way you will get it.
The mistake I see too often is that Central Mass buyers are hesitant to offer full price. I get it!! It’s HARD!! It’s downright painful! But so is losing a home that you love. Especially when there just aren’t that many out there to choose from and who knows when another one will come on the market that you will love as much.
3) BE PREPARED TO ACT QUICKLY
Sellers in Central Mass, get to be choosy as to which offer they accept if they have a move in ready home. And buyers have to act QUICK!! Schedule appointment same day it comes on market. (TIP:If you are looking to buy in Central Mass, you want to make sure you are receiving automatic emails from your realtor of homes that meet your needs and budget sent to your email the day they come on market!)
So being aware of this will help you! Have your Realtor price the Central Mass home you are interested in to see the value and make sure it is priced fairly for that particular town and condition. Full time Realtors who know the Central Mass market well and can advise you based on their knowledge are your best advocate!
It is so important to know where the line is to GET the house you want, without overpaying! Use their market knowledge to assist you in determining what you should offer on a Central Mass home that you fall in love with.
4) USE AN ESCALATION CLAUSE
My favorite technique in this competitive market when I know there will be a bidding war is what is called an escalation clause. In a bidding war, I find an escalation clause absolutely essential for my buyers who really want a certain Central Mass home. There is more about escalation clauses here
As a Central Mass listing agent, escalation clauses are wonderful to receive in a bidding war because it shows my seller how much motivation a particular buyer has toward purchasing their home! When the Central Mass seller and seller agent see that, they are much more likely to choose that offer.
This is how they work: you submit your written offer with the offer number you choose with an escalation clause that states that you, the buyer are willing to increase your offer by 2,500 or 3,000 more than the highest offer received up to a maximum price of the your choosing. That is the hard part! You need to do some soul searching and think about what the maximum price is you would be comfortable with paying for this Central Mass home.
(Which also means, what price would you be UNHAPPY with if you got the house, based on the value you and your realtor see in the home.) You also want to avoid overbidding and then regretting it later as this article discusses here which I see a lot in this type of market.
Now, I know this sounds risky!!! However, there are ways to protect yourself! First and foremost, only do this if your Realtor foresees a bidding war on this particular property. Also, I would advise to write into the offer that it is contingent on the fact that your offer is to be kept confidential from all other buyers who may be competing in this bidding war. Now, many agents assume this is always true, but it’s NOT. If a savvy agent sees an advantage to getting sellers permission to disclose offers to other buyers in an effort to get the highest possible price, they could potentially do that.
Another point to understand when doing an escalation clause is that It would be wiser to only do it for a listing that has a Realtor, as opposed to just a real estate agent or a for sale by owner. The reason for this is because Realtors that belong to the local and state association must abide by a strict honest code of ethics that home sellers and agents are not necessarily bound by. You need to have the utmost trust that you are being dealt with ethically and honestly when you are making this type of offer to protect yourself. Little info here on difference between a real estate agent and a Realtor.
Now, a good thing to keep in mind too, is that in any bidding war, many buyers struggle with offering high, so you may not even HAVE to go to your max. But at least it’s an option better than losing the house to someone else over a few thousand dollars.
5) USE AN EXPERIENCED, KNOWLEDGEABLE FULL TIME REALTOR
The most helpful technique of all is to make sure you choose your Central Mass Realtor carefully! Buying a home is a HUGE investment on your part! You need a highly experienced and highly knowledgeable Central Mass Realtor that you TRUST to walk you through the process and guide you to make the best decisions for your individual needs and budget! Check online reviews! Who you choose can make a big difference in your ability to get the home you want at the price you want!
You might need to stretch your budget and your judgement a bit more than expected in this particular sellers market but nothing beats the feeling of owning a Central Mass home you truly love! Look at the big, long term picture. A few thousand dollars isn’t going to matter as much in a few years as you build equity and enjoy the memories you are creating in your home! Especially if you still have a relatively low interest rate!
Happy house hunting and good luck!
My name is Lynda Hafner. I am a full time Realtor for ERA Key Realty Services who specializes in Central Mass., in the areas surrounding Spencer, Charlton, Worcester and Auburn. I would absolutely love the opportunity to help you find a Spencer area home! I am easy to reach and I RETURN PHONE CALLS ! :)) Call or text me 508-942-7923
Learn more about me, read my many five star reviews and find lots more useful info to help home buyers and sellers on my blog at www.lyndahafnerhomes.com or at firstname.lastname@example.org