Over the last couple of years, we’ve watched the real estate market grow more and more competitive among buyers, especially here in Pittsburgh. In fact, we’ve seen some houses enter the market and quickly receive 10+ offers in a matter of days, allowing the sellers to quickly pull the home off the market and pick an offer that fits their liking. In such an intense market, it’s left many people wondering how to be a competitive buyer in 2022, especially when the real estate market seems to be stacked against them!x
Here’s the good news: We have an inside window for what’s working and what isn’t from the buyer’s side. We’ve compiled a list of recommendations to use as you enter the housing market, and they’re useful regardless of whether the current market favors buyers or sellers—and they’re also useful whenever the market is hot. So, even if the market cools down and heats up again, you can continue to use this guidance to help your offer stand out from the competition.
5 Ways to Be A Competitive Buyer
If you’d like to be a competitive homebuyer in 2022 or beyond, follow these steps:
1. Use a local mortgage lender.
Whenever possible, work with a local lender over a national lender. Time and time again, we’ve watched national lenders offer inaccurate cost estimates—and the inaccuracies often aren’t discovered until the houses are under contract.
But local lenders are more familiar with the local market. They have a deep understanding of the real estate industry in your area, so they’re much more knowledgeable on closing costs, taxes, and other variables as you’re shopping for a new home.
If you need help finding a local lender, we’ll be happy to point you toward a Pittsburgh-based mortgage lender we know and trust.
And if you’d like more information on mortgages, check out the different types of mortgages available to you.
2. Know what you want—and where you can be flexible.
We’ve discussed in the past how many buyers don’t truly know what they want until they see it. Time and time again, we’ve seen buyers who are insistent on landing a home that meets certain criteria, only to fall in love with something entirely different.
You should still write a list of features you’d like to see in a home—this helps your real estate agent immensely in finding a starting point for you—but remember that flexibility is essential in a competitive seller’s market.
When there are fewer homes available, you’re less likely to find something that meets all of your requirements, and you’ll face stiff competition on any home that does.
Know where you can give in a little.
This is a balance of prioritizing what matters most while also looking for room to make a house work for you. While sometimes wish-list items like a two-car garage just aren’t attainable with limited inventory, often you can create a solution with an almost-perfect house.
For example, we often encourage buyers to consider homes that might be missing the dream kitchen or second bathroom because we see space in the layout—and the budget—to create the house they’re looking for. In other words, you can buy a home that fits 90% of your desired criteria and then invest in additions or remodeling to attain the other 10%.
3. Work smarter at every stage.
With a fast-moving market, it is easy for buyers to get burned out if they sprint through every stage. We liken the current market to a merry-go-round; you need to watch the pace of how quickly the market is moving and make sure you’re well informed before you make the leap onto the carousel.
Our philosophy is to streamline what we can: setting up an easy-to-use automated online search that shows you listings quickly, setting up systems to book showings quickly so our buyers can be the first ones into houses, and keeping tech close by so we can pull disclosures and look at market history while we’re in a house.
When it’s time to make an offer, it’s important to work with an experienced agent that will walk you through your options and help you understand the risks and rewards of the terms you put together. Sure, skipping inspections may help you win a competitive bid, but are you ready to tackle that unexpected sewer line issue?
A smart offer is one that is well informed, and leaves you with no regrets… whether you get the house or keep looking for the next one!
4. Keep the seller at the front of your mind.
Remember: You’re buying a house, but you’re buying it from someone who’s just as human as you are! Even if you never meet, they’re also dealing with an emotional situation and the stress of moving from one house to another.
Whenever possible, make their life easier and your offer more attractive. A few tactics you can use:
Schedule your home inspection as soon as possible to show you mean business.
Offer a rent-back agreement so they don’t have to move out immediately. This is a bit trickier and requires a greater logistical lift on your end, but it removes the urgency for them to move out and gives you more time to get your move in order. Even if they don’t take the offer, the fact that you’re willing to accommodate their schedule could make you a more attractive buyer.
Write an offer letter. Writing an offer letter is a little like writing a cover letter for a new job—it’s an opportunity to stand out from the crowd. Details you can cover in your offer letter include:
Who you and your family are. This will make you feel like real people—but don’t get too personal! Instead, be personable while limiting yourself to what you would share with someone if you were meeting them for the first time.
List of features that make the home desirable to you and your family.
List of features and aspects you love about the community and neighborhood.
Limit the seller’s risk related to inspections and appraisal. Offering to take on some of the burden of repairs or appraisal risk demonstrates you are committed to the house and will try to find a solution whenever the transaction throws a curveball.
We always check with the listing agent as well to see if there are any particular motivations for the seller that our buyers may be able to accommodate. Regardless, do whatever you can so that your offer makes an impression on the seller!
5. Work with an experienced agent you feel comfortable with.
Yes, we’re a little biased on this one, but there’s plenty of value a proven agent brings to the table. For example, an experienced agent:
Has been through competitive markets before, so they know what to expect and the challenges that may pop up.
Know how to make a competitive and compelling offer, which could mean getting into a house without straining your financial resources.
Ask the right questions to help you find a great home.
And if they’re a real estate agent you feel comfortable with, they can help remain calm and focused as you hit the bumpier parts of the competitive market.
Finding An Agent To Help You Remain Competitive
While we’d certainly love to help you on your home buyer’s journey, we always insist on making sure we’re a good fit first. Feel free to reach out to tell us more about yourself and the home you’re looking for! Email us at theblocks@blocksintheburgh.com. We can’t wait to meet you!
Cheers,
Julie & Ted