The Denver market has always been a competitive one. The ramifications of COVID coupled with record low interest rates have only grown the disparity between supply and demand. Less homeowners are looking to sell and more homeowners are looking to buy. Many homes are receiving multiple offers and having to decide between several competitive bids. The ensuing bidding wars may seem like ideal circumstances if you intend on selling your home but chances are that means you’re also looking to buy. Realtor.com offers these key tips to ensure you have an edge when the going and the bidding gets tough.
#1 Make an informed and realistic budget.
Accounting for various factors like mortgage payment, interest rate, loan terms, down payment, home maintenance, utilities, etc., create a realistic budget to create your financial profile. Determine how much you can actually afford and be prepared to walk away when a home price exceeds your financial constraints.
#2 Get pre-approved.
This status comes with a letter that is almost essential when making offers in the Denver market. Assurance that you can actually afford what you’re offering will give you the credibility you need to stand against other offers.
#3 Increase your down payment or earnest money.
If it fits within your budget, offering a higher down payment or more earnest money will let the sellers know how committed you are to this particular transaction. Just keep in mind that earnest money is non-refundable past a certain date depending on the parameters of your contract. Make informed and confident real estate moves.
#4 Offer over-asking.
You might think that the highest bidder wins and that is probably true, but that doesn’t always mean offering the asking price, nor does it mean offering thousands and thousands of dollars more than the asking price. Having the right realtor by your side to help you draft the most competitive offer is key. Corken + Company, finding real estate solutions without limits for more than twenty years in Denver Metro, will use our experience and market knowledge to create that ideal offer. Sometimes it means going a little over-asking, sometimes it means going a lot, and sometimes it just takes a little finesse with timeline, terms, and contingencies. Money talks, but a contract expertly tailored to a particular situation hums a pretty little tune.
#5 Consider waving contingencies.
As mentioned above, this may be just the right strategy to reach the most competitive offer. But, remember that contingencies act as safeguards for the buyer while their under contract. Eliminating these safeguards can reassure the sellers of your intent, but it can also be a disservice to you as the buyer. Carefully weigh the pros and cons in each situation. Is the reward worth the risk?
#6 Be quick.
This will pay out in two ways. First, when you have found your dream home, be ready to make a competitive offer and have your realtor draft a few backups. You want to be the first or one of the first to make an offer because the majority of Denver homes spend less than a week on the market. You can even include an escalation clause to your offer which automatically increases your offer in the event that another offer matches yours. The second way speed can work to your advantage is in the timeline. If you are willing to move through inspections and other contract deadlines at a quicker pace, buyers will notice your enthusiasm.
#7 Be flexible.
The less stringent your timeline, the better. Ideally, put yourself in a position that allows you to progress more quickly or more slowly through the process according to the seller’s timeline. Making concessions in the timeline might be more valuable to the seller than any amount of money. Sometimes timing is just as, if not more, important. Let them set the pace so they won’t feel rushed or put off by yours. You can even offer the option to rent back the home if they need lots of time to make their transition.
With these tips in mind and Corken & Company as your real estate representation, bring on the bidding.
