What a crazy market we’re in right now in Austin! Low interest rates, combined with low inventory and numerous buyers has led to bidding wars and homes that stay on the market for just a matter of days. Because these bidding wars are often won by people offering to pay all cash or significantly above the list price, and promising hefty down payments, you may have to come to terms with the possibility of your offer getting rejected. However, we are winning offers for our clients and there are a number of tactics we use that can help you secure the home you want:
Get a Preapproval letter from a LOCAL Lender. Make sure to submit all of your financing documentation to your lender before even looking at homes. Desirable homes right now are staying on the market for just a matter of days, and you want to be able to move quickly when you find one you want – and it’s likely sellers won’t even consider your offer without this.
Lead with your BEST OFFER: Consider pushing for the highest you can go — just make sure that it is a price you can still afford, with terms that feel comfortable for you. In Austin and its surrounding towns, we are seeing multiple offer situations on almost every listing at every price point right now. Of course, always know your absolute bottom line number, and don’t cross it. If you can’t stretch your budget any further, there are other ways you can make a transaction with you more attractive for the seller:
- Offer fewer contingencies – but keep in mind, fewer contingencies can leave you in a vulnerable position, with fewer “outs” in the contract. We will help you educate you as you weigh these risks, but here are some of what we’re doing right now with our clients:
- Shortening (or waiving) the option period. With a shortened option period (under 5 days) we schedule the inspection at the same time we submit your offer. If your offer is not accepted, we can always cancel.
- Waiving the appraisal contingency. This does not mean your lender will not appraise the property, but if it appraises too low (which can happen in a multiple offer bidding war) you’ll need to make up the difference with your own funds. We can also set a floor for the appraisal amount, so you are not overly exposed if it comes in lower than your offer price.
- Agree to move in at the seller’s most convenient date. Many sellers are looking for leasebacks while they find their new home. Consider offering a leaseback with great terms, possibly no rent at all. We will always communicate with the seller’s agent to find out what is most valuable for their client in advance of your offer.
- Write a personal letter to the seller to outline what it is you absolutely love about their home. Many sellers would prefer to have their beloved home go to someone who loves it as much as they do.
- Consider a (much) higher earnest money amount – this shows you are serious about the home, and it will count towards your down payment when you close.
- Additionally, our team will always present clean, coherent offers and communicate with the seller’s agent to make sure they know that we are professionals and enjoyable to work with.
If your best offer was rejected: You can make an offer to be in the backup position. This means that you’ll be the next buyer in line should the first buyer walk away from their contract.
We can also include a right-to-refuse clause that protects you from being bound to purchase the property, while still being the seller’s first option when the current deal falls through.
If the rejection happened even with your best possible offer, it may be time to discuss further options. Yes, that house could’ve been your dream home, but in a tight market, there are a lot of things beyond our control. We know the best thing we can do is work together to strategize so that you can be in a more competitive position for the next house you’ll be gunning for. We’ll be there every step of the way to help you win.
If you’ve put in an offer that was rejected, here are some further tips:
Don’t linger on your previous rejection. We know you really wanted that house, but lamenting its loss can prevent you from giving future great houses a fair chance. Be prepared to move on quickly so that you can readily consider other homes.
Do not get emotionally attached to a house that’s not yours yet! You can for sure love a house, but don’t start thinking of it as “your house”; this will add to your disappointment. Keep your hopes and emotions in check and know that you will find a house eventually.
Take note of what made you love the first home. Instead of dwelling on the rejection, use the first home as a reference for the next. Make note of the features that made the first home so attractive to you. Just because you didn’t get the house doesn’t mean that you’ll never find another one with similar qualities.
Learn from the experience and move on! We know firsthand how disappointing and tiring it can be to keep losing out on offers, but we also know that if you keep trying you can find a home you’ll love.
Keep in mind that the home you buy today may not be your “forever home’. Learn to be OK with not being able to check off all of your boxes in 2021. Purchasing a home can be your biggest investment and lead you down the road to new opportunities in the following years.
Please reach out to us if you are considering purchasing or selling in this market, we are happy to answer your questions and advise you on your next steps.
