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  • Writer's pictureCarmen Hobson


If we all knew how 2020 and 2021 would pan out with regards to real estate, we would have invested in real estate big time in 2019! With prices soaring, and inventory remaining scarce, it’s a tough world out there for buyers. Time to get smart and creative. For you buyers out there still struggling to win a bid on the home of your dreams, here are a few hints that might help you be the stand out winner in a multiple offer situation:

1. Have a current, full pre-approval letter in hand at the time of any offer. This means your approval is subject only to your appraisal coming in at purchase price or greater, and a satisfactory title report being issued. A full pre-approval differs from a pre-qualification letter. With a prequal letter, you only need to submit an application and very little research is done or verified by your lender before issuing your pre-qual letter. A full pre-approval letter means you lender has done more indepth research and verifying of your strength as a buyer. Things such as income, job time, down payment availability, have all been verified, and as such, they consider you a stronger applicant. So will the seller.

2. Structure your offer to be as simple as possible. The more demands you make, the less strength you have to win a bid. If there are things you must have (such as repairs you know will need to happen), ask for those repairs in the form of a credit from the seller in the amount of the repair. This amount can not be paid back to you from the seller in the form of cash, but the amount can be credited towards your closing costs and pre-paid costs for your loan, or as a deduction in the purchase price in the amount of the repairs. This makes these types of details more palatable to the seller, as it’s unlikely they will be able to secure a contractor to fix things within the timeframe to close. A seller credit to the buyer can be easily handled by the title company upon closing. Also, keep your contingency dates as short as reasonably possible. Shorter contingency releases make the sellers feel more comfortable, as they will wait less time before they know for sure if their deal is solid with you.

3. Be reasonable with your price. This door swings both ways. If there is intrinsic value to you in paying over list price for a home, then feel free to do so, as that is typical in the current market. Just be aware that none of us have a crystal ball, and if the market levels out, you may owe more on the home than it’s worth after a time. In long term holds (if you plan on being there for many years), this is not of great concern, but if you think you might be moving in a year or two, consider this trade off carefully. On the flip-side, don’t offer too little for no real reason, as you’re likely to not be considered as a viable buyer. With that said, a lower offer that can be supported with recent comparable sales is a viable offer. You may not be the winning bid in this market, as many homes are selling well above list regardless of recent comparable sales, but knowing the current market value of the home you’re offering on can save you heartache later if you realize you’ve paid more than you’ll get back out of the home is you sell it shortly after purchasing it.

4. Make sure your agent is competent (like me!), and has your back with contingencies for items such as home inspections, appraisals, financing, and title concerns. I’m seeing offers coming in with these items waived, and that can wrap you into a deal you can’t get out of. Not a good position you want to be in. If you have the funds to purchase a home that ends up with a spendy issue, or you have high risk tolerance, you might be comfortable waiving these things (and I’ve had clients do so), but this is another term that should be very carefully considered. If you waive all your contingencies, then want to terminate the contract, not only will you most likely lose your earnest money, but you may be subject to a law suit from the seller for what is called “specific performance”. This is a worse case scenario that doesn’t happen often, but it does happen. “Specific performance” is a protection for sellers, so that buyers just can’t back out for no reason, leaving the seller without a buyer and more expense to resell the home.

5. On the agent competency thing. Don’t feel you need to work with the first agent you talk with, or one you have been working with that you feel isn’t working in your best interest. Interview a few agents until you find one you feel comfortable with from a competency standpoint, and also have a good personality connection with. This will keep you from stressing out, and knowing you have an agent in your corner who will support you throughout the entire process.

We might be in stressful times, and you’re making one of the greatest financial decisions of your life, but it can be a tremendously rewarding experience, so off you go…and enjoy!

Carmen Hobson

Owner/Broker Touchstone Montana Real Estate

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