raleigh home closing lawyer, nyc home closing lawyer, charlotte home closing lawyer, los angeles home closing lawyer, san fran home closing lawyer

Negotiating Real Estate Purchases in a Seller’s Market

For more than a year, the Raleigh, Charlotte, Greensboro, housing market has been hot. When purchasing in an area where demand exceeds the amount of readily available homes, competition is fierce. Properties can be listed at a premium price, multiple offers may be received, and sellers are less likely to make concessions. Potential home buyers do not want to be caught off guard when entering a Sellers’ Market. Buyers must be persistent and resilient to obtain the property that they want in a competitive market. and ready to pull the trigger if they find a house that they want. 

While a Sellers’ Market can be intimidating to many, especially for first time home buyers, our real estate attorneys provide the following tips:

Hire a Professional Real Estate Lawyer

A savvy buyer should line up both their lender and real estate attorney prior to starting their home search, so that when they find the desired property they can make a move on it immediately without delay and risk of losing the property to a faster buyer or a buyer with better terms. When you have a desired property in mind, you want your closing to go seamlessly without any issues. Having a skilled real estate attorney can increase the chances of you closing your property successfully.

Get a Preapproval Letter and Proof of Funds 

Our real estate lawyer think offers are more effective when submitted with a lender approval letter. Therefore, one of the first steps in real estate purchasing preparedness is to get a lender preapproval letter.

Make a Move on the Desired Property Promptly Without Delay

Accept the earliest available property showing of the residential or commercial property. Off-hour or weekday showings may give you the advantage you need to submit your offer before anyone else.

Avoid the Urge to Submit a Lowball or Haggling Offer

In a seller’s market, there is reduced supply and increased demand, many time meaning multiple competing offers. If you really want the property, do not lowball the offer, make an aggressive offer to lock down the property of your choice. While some relators advised previously on offering less than the list price, in a seller’s market where listing may go above asking, you could risk losing the property.

Increase Your Earnest Money Deposit

The earnest money deposit is an important component of the real estate buying process the home buying process. It tells the seller you are a good faith buyer, committed to the purchase, and it helps fund the down payment. 

Defaulting on a contract may jeopardize your earnest money and increase your chances of forfeiting those funds if you choose to walk away from the deal. 

Most deposits will range from 1-2% of the purchase price, but in a high demand market, the seller may ask for a higher deposit. If you know you will be competing for a property, you may want to propose a larger earnest deposit in your initial offer to increase your chances of winning the bid. 

Skip Low-Risk Concessions and Contingencies

Deal sweeteners such as a home warranty, repair credit, or asking the seller to pay for closing costs are concessions the buyer may ask the seller to pay for, but offers are more competitive, the less contingencies and seller costs demanded.
It is not a good idea to ask for additional allowances in a market where houses are selling quickly. 

Contingencies are, for example, appraisal value matching or exceeding purchase price, securing financing, and passing inspections, which must be met in order for the Purchase and Sale Agreement to become binding, otherwise it is considered null and void. Many contingency clauses protect the buyer’s ability to walk away from the contract with their earnest money deposit if the clause is not satisfied. 

Consider removing contingencies that pose minimal risk to the buyer. Hiring a real estate lawyer to review, draft or remove any contingencies prior to submission can help protect you from opening yourself up to unnecessary risks. 

Determine Seller Motivations

Ask or find out from the agent what the sellers needs are. Sellers may be price-driven, or emotionally invested and looking for a buyer that will love and care for their home as they have.

In a multiple offer situation, writing a personal letter or making a video with your phone can entice a seller to accept your offer of others. These communications should highlight favorable aspects of the property the buyer feels are unique such as the location, architecture, history, décor, and intended purpose.

Contact Tien Law Firm’s Real Estate Closing Lawyers

For questions or help with your real estate closing or buying process, contact Tien Law Firm’s real estate attorneys at (888) 988-6613 who are happy to answer your questions and guide your through the closing process.

Related Posts