Be A Bidding War Winner In The Richmond Virginia Housing Market
Bidding wars are becoming more common due to the limited number of homes on the market in the RICHMOND VIRGINIA Metropolitan Area as compared to the number of buyers wanting to lock in an interest rate and make a purchase, thinking the interest rates will soon be on the rise again. Reporting from the National Association of Realtors(NAR), reveals that nationwide sellers receive an average of 4.8 offers per sale. Take a look at the map below to see the state-by-state statistics:
NAR also reports that the typical home buyer makes two offers before their third one is accepted by the seller. With this type of stiff competition, it is important to know what tactics you can use to beat out the competition.
Homes Are A Hot Commodity These Days
Here are a few tools to add to your toolbox...
Up The Ante: In today's market, many buyers are thinking of offering more than the asking price in an effort to sweeten the deal. While more offers are being accepted for above asking price, due to the large number of prospective homebuyers, you want to remain mindful of your budget and market value for your location. Another consideration relates to the appraisal. Just because you offer a higher amount doesn't mean that it will appraise for that amount. In the contract for RICHMOND VIRGINIA MLS, it says that you have the ability to re-negotiate the agreed upon price; however, we are seeing a number of buyers offer an appraisal gap differential. This differential means more money that the purchaser may potentially have to bring more money to the closing table, but it provides more security for the seller that they will receive the offered and agreed-upon price.
Offer a Larger Earnest Money Deposit: You could also consider offering a larger deposit up front. An earnest money deposit is a good faith gesture that shows you are interested in moving forward with the purchase. The check is deposited and held in an escrow account and then appears as a credit at closing. However, if you get out of the contract for any reason other than that which is allowed within the contract, you risk losing your earnest money deposit. On average in the RICHMOND VIRGINIA market an earnest money deposit is 0.5% to 1% of the agreed upon price. Sometimes, a higher earnest money deposit may be more appealing to a seller in this hot housing market, since you are showing the seller you are seriously interested in purchasing the home.
Give Your Down Payment A Boost: A larger down payment will reduce your needed financing and send the seller the message that there is less risk involved in a deal with you as their purchaser.
Thoughts On The Home Inspection: In a typical market, I would never recommend waiving a home inspection because it's important information to have when purchasing a home. However, in this market we are seeing a number of buyers waiving that contingency, which thus translates into less liability for the seller.
Other Perks That May Seal The Deal: Here a few!
Flexible move-in dates
Free rent-back periods
Buyer pays a portion or all of seller closing costs
No contingencies (ex: buyer has to sell current home)
Let's Cut To The Chase
Today's RICHMOND VIRGINIA housing market is tough! These tips will get you started, but let's connect and team up to find you your ideal home.
