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Email Jan & Wally
Jan Bigelow: 928.300.1699
Wally Reule: 928.301.5943
As we talked about in the newsletter, Sedona home inventory is at an all-time low with only 180 current, active listings. In 2008 there were 486 active listings. Inventory has declined every year since. This creates challenges for many would-be buyers. Homes are being snatched up within a matter of days.
So, what should home buyers do in this tight market? Here are a few steps buyers can take to help land the winning bid, while protecting themselves from paying more that they should:
1. Get a pre-approval letter. This shows the seller that you qualify, and also gives you an idea of how much of a mortgage you can afford so that you can limit your search to houses within your price range.
2. Make sure your agent knows the competition. Knowing how many people are interested in the house can help you make an offer that will be taken seriously. Your broker can ask the listing agent how many people visited an open house, and if the home is likely to receive multiple offers. This can help you prepare for a bidding war.
3. Add an escalation clause to your arsenal. If you expect to compete with multiple offers, consider using an escalation clause, which lays out how much more you are willing to pay over a competing offer.
4. Be flexible with timing. if you can show that you are willing to move as quickly — or as slowly — as the seller needs, you can improve your chances of winning a bid.
5. Tug at the heart strings. Try to find something in common with the seller.Are you both veterans? Do you both have young children? Buyers can send a personal letter that shows how much they love the home or how they plan to use it. Some sellers have an emotional attachment to their home, and may want to know it is going to buyers who will appreciate it as much as they do.
6. Get a pre-inspection. Anything you can do to speed up the buying process and make it easier for the seller might improve your chances of getting the home you want, brokers say. If you pay in advance for a pre-inspection, it can reduce the time spent on negotiating. This extra also shows you are serious about the home.
7. Pay more cash up front. Make your offer stand out by offering more money up front in what is called the earnest money deposit. The earnest money is cash provided by the buyer, ranging from 1 percent to up to 5 percent of the purchase price, that gets held in escrow until the sale closes. This also shows your commitment to buy the house.