If you ever want to see the law of supply and demand in action, just watch the real estate market. No matter what part of the country you live in, the number of homes on the market has a direct effect on price and availability.
Home buyers are duking it out over a limited amount of inventory in Denver. Prices are on the rise and sellers are having little trouble selling their property without a lot of buyer conditions. It’s tough for the buyer today, but there are ways to improve your chances of getting the home you want.
How the Offer Process Works
In Denver we are currently in a strong seller’s market. Inventory, especially in the mid-market range, has been very limited. Sellers are reaping the benefits of higher demand and higher prices, while buyers are in the trenches with their real estate agents, trying to purchase a home.
Working with your real estate agent, when you find a home you like and want to buy it, you present a written offer to the homeowner. In a seller’s market, there may be several offers submitted by different buyers over one or two days. Typically, the current owner’s real estate agent will schedule a time to present all of the offers to the homeowner at one time, giving a fair shot to all of the potential buyers.
The agent will go through all of the offers with the seller and provide insight, including the pros and cons of each. The homeowner will make the ultimate decision and an offer will be selected.
Standing Out From the Crowd
As a buyer, wanting to purchase a home in a seller’s market, you need to set yourself apart so your offer stands out when presented to the seller. To stand out, be well prepared. A seller will lean towards an offer with the easiest path to closing. It isn’t always about the highest price.
If you are not paying cash, solid financing is the next best thing. With your offer provide a Pre-Approval Letter. This is different from a Pre-Qualification letter, which is relatively easy to get from any lender or even online, and doesn’t necessarily assure your real ability to acquire financing.
The Pre-Approval Letter
A Pre-Approval Letter is a more reliable picture of your ability to secure financing, although more difficult to obtain. This is essentially the beginning stages of applying for a mortgage loan. You will be asked for a lot of documentation, and the process will take longer, so start early. To the seller, you are more qualified because you demonstrate a greater chance of getting the financing you need and completing the purchase with the fewest hassles.
Your real estate agent will be able to point you in the right direction of a good lender, if you don’t already have one. Taking the time to prepare before you start looking at homes will ultimately save you time and frustration. Knowing what you are qualified to buy, and the advantage of having a jump start on a loan, will give you a better opportunity to get the home you want in a competitive market.