Wednesday, July 1, 2020 - by Brandi Pearl Thompson, president, Greater Chattanooga Realtors
You’ve probably noticed that there are fewer houses for sale right now. While your observation is correct, what you might not realize is that there has been a drastic increase in homes sold. Currently, our housing market is competitive and properties are moving quickly. When you put together these factors, you’re more likely going to see multiple offers on listed properties.
Exactly how fast is the market moving? For the week ending on June 20, there were 1,900 homes for sale in the Greater Chattanooga area.
For comparison, the same week a year ago, there were nearly 3,000. That’s a 36.6% decrease in houses for sale. If that wasn’t enough, the Pending Sales of homes for sale for the week ending on June 20 was 360. The same week last year there were 215. That’s a 67.4% increase in sales.
We’re in a seller’s market, meaning home prices are a bit higher and inventory is much lower. This means that buyers are more than likely competing with multiple bidders. In such a competitive market, buyers need every advantage they can get, and working with a realtor to make the best purchase offer is a smart move. And surprisingly, the bid with the highest price is not always the one the seller chooses.
Sellers want to get the best price for their home, but that isn’t always the deciding factor. One way of making your offer stronger is to eliminate or reduce the number of contingencies by paying for a pre-offer inspection. That way, once your offer is submitted, it should be less of a hassle for the seller and one that gets strong consideration.
That doesn’t mean, however, that you should just submit a below-market offer with no contingencies. In this market, it is not the time to make a lowball offer. When you are going up against more than one potential buyer, it’s the time to put your best foot forward on the initial offer. This might be your one chance to convince the owner to sell their home to you, so it’s all the more important to submit your best possible purchase offer up-front.
If you can pay cash, the chances that your offer will be accepted are better. Sellers appreciate all-cash offers as they usually mean a quick, streamlined purchase. Financing issues, such as delays in mortgage approval or getting funds moved from the buyer’s bank account, are the primary causes of delays in the closing process. If a seller can avoid a lengthy or complicated process by choosing an all-cash buyer, there’s a good chance that they will.
For most people, however, a cash offer isn’t a possibility, and you’ll need to qualify for some variety of mortgage financing. If this is your situation, it’s a good idea to get preapproved for a mortgage before you begin the search process. With loan preapproval, you’ll be able to make a solid commitment to buy, and your offer will be more appealing to the seller.
And of course, the most important thing that you can do to give yourself an advantage is to hire a realtor. Realtors have real insights and unparalleled knowledge of our local market and can help navigate the complicated home buying process. Realtors are here to be your housing resource.