If you want to successfully buy a home in the Oconomowoc area in 2021, being decisive, aggressive on the offer price and terms, and working swiftly can help you succeed.
The pandemic that began last year did not deter home buyers, like it did to many sellers. Pent up buyer demand, and remarkably low inventory this year has caused bidding wars to surge for homes in Oconomowoc and surrounding area.
With no sign of buyer competition slowing down in the near future, being aware of the emerging trends in real estate negotiations can help you understand the local market and how to craft the winning bid on a home.
The trends are not listed in any particular order.
Trend #1: Appraisal Gap Coverage.
Bidding wars swell the final sales price, and sellers can get anxious about their home appraising out for the price they accepted at. In an effort to make a bid stand out to a seller, we have seen buyers offer an additional amount over the home’s appraised value, if the accepted purchase price exceeds the appraisal. This proposal sweetens the deal for the seller, and shows that the buyer is serious.
Trend #2: Multiple Counter Offers.
When a seller receives more than one bid they like, they have the option to multiple counter the appealing offers. Knowing other enticing bids are on the table, determined and capable buyers sometimes decide to just write a better offer instead, such as offering a higher purchase price.
If you receive a multiple counter offer from the seller, it means you are in the running for the home. Like any of these trends listed, it is wise to consult with your REALTOR® how to approach your unique multiple counter situation.
Trend #3: Secondary Offers.
While secondary offers imply that you did not get the winning bid, you could still score the home in the end. A seller can accept one primary offer and have several “back up offers” known as secondary offers. If the initial primary offer falls through, the seller could move on to one of the secondary offers in line. Having secondary offers prevents the seller from putting the home back on the market if the first deal falls through.
Trend #4: Deadline for submitted offers.
To help manage several bids, it has become common for sellers to set a deadline for when any and all offers are due by, so they can review them simultaneously. In this case, being decisive and acting quickly is necessary as a buyer, to get your offer in front of the seller in time for them to review.
Trend #5: Seller lease-back option.
Accommodating the sellers with a lease-back option can help your offer stand out from the crowd. This option allows the buyer to rent the home back to the seller, for a predetermined amount of time after closing.
In this fast-paced market, some sellers are unprepared if their home sells quickly or have not found a new place to live yet. Catering to the seller’s needs can help you score the winning bid.
Being familiar with the trends and conditions of the real estate market you want to purchase in can help you set realistic expectations. Hiring an experienced REALTOR® who has a pulse on the local market can be your biggest asset, to help you successfully purchase a home in today’s competitive market. The best part: the seller pays both commissions at closing. It would be foolish not to hire your own agent that represents you and your best interests when purchasing real estate.
If you’re looking to purchase a home in Oconomowoc or the Lake Country area, Oconomowoc Realty is here to help. Just fill out the short form below to start the conversation, or contact one of our agents directly.