11 Ways For A Buyer to Finish First in a Low Inventory Market (in a pandemic)

11 Ways For A Buyer to Finish First in a Low Inventory Market (in a pandemic)

 While we are a week away from having better numbers (which I’ll share next week), I can tell you from the street that certain segments of the housing market are in a complete Sellers’ market.

• 2 Realtors I know were talking with each other recently. Both realized they bid on the same property and lost.  One offer was 15k over asking price and didn’t get it.
• One deal we won had 5 offers on it. Another had 3.  Another we represented on the listing side we were able to negotiate the Buyer to waive the inspection contingency.  
  

• Good inventory goes immediately, and ugly homes are now selling.

So, what is a Buyer to do?  Here are a few strategies to win out in in a tight market.

1.  Understand the market and realize that there is also pent up demand from Buyers not able to get down yet. The Palm Beaches is a hot spot for a lot of reasons and expect prices to rise as summer ends and we get closer to season. Your basic laws of Supply and Demand. Realize a “good deal today” might be overpaying now in certain circumstances.

2.  Go over and understand the AS-IS Contract. Don’t wait until it’s time to write up an offer to learn from it. An AS-IS Contracts lets you cancel a contract at your sole discretion within a designated period of time. It’s a powerful tool for a Buyer.

*The Buying Process (see the Florida AS-IS Contract here)

*Buyer FAQ

3.  Speed.

Write up your offers fast with very short acceptance periods. Don’t sleep on things as you are just inviting competition. Cancel later if you want but if get it tied up.  If it’s written up properly by your Realtor, your full deposit will be returned. Think of the AS-IS contract as a free option to Buy.

4.  If you are getting a loan or want to have a loan (loans are under 3% ?!?), you want to get pre-approved now.  If you get your materials ready beforehand, it can cut the approval time down to 10-15 days.  Since most AS IS inspection periods are 10-15 days, it puts you on par with a cash deal since your contingency periods are the same.

5. 5-10% rule.  Sellers are looking for 5-10% down.  Give it to them in the deposit and don’t play games with small percentages down. 

6.  Have the loan officer double up with your Buyer agent and call as well. It’s good for the Sellers agent to hear from a second voice to support the Buyer.

7.  Write a letter. Seems cheesy but the more you personalize it the better. Tell them that you are not going to nitpick over little things in the inspection. This does a long way.

8.  Do not be antagonistic. It’s good to have an assertive agent but you want to make sure you win out.

9.  Be flexible with the Sellers closing date. They might need to close fast. They might be older and need more time to due to Covid or other stressors. Be sensitive to the Seller’s needs.

10.  Help with little things.  Do they want to you to take furniture off their hands?

11.  When in Rome do as the Romans and when in Florida do as the Floridians. You are not in New York City. Our contracts are not “Binders” and closing dates are not “On or About”. It’s important to learn our contracts and what to do in certain situations.

Click here to find out more about understanding Florida contracts.

Jeff Lichtenstein is owner and broker of Echo Fine Properties, a luxury real estate brokerage selling real estate in Jupiter  and homes in Palm Beach Gardens, Florida. He has 20 years of real estate experience, has closed over a 1,000 transactions, and manages over 50 agents in a non-traditional model of real estate that mimics a traditional business model.  Some publications he has been quoted in.

Feel free to ask him a question directly at jeff@EchoFineProperties.com.