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The amount of available homes on the market is down about 40% compared to last year.* This inventory shortage is causing home prices to rise and bidding wars to become more and more common. This is a tough situation to be in and can cause a lot of stress. And it doesn’t look like this problem will be going away anytime soon. So, how do you make the best offer on a house when there are other offers on the table?

Who’s on Your Team?

As you start the home buying process, it’s important to find a team who you trust and feel comfortable with. This will help make the process simpler and faster (and hopefully minimize stress too!).

  • You want the Realtor® who will pick up the phone when you call to ask questions: Make sure you’re working with a real estate agent who understands the pressures of the current market, and can act quickly when you’re ready to move forward on a property you’re interested in purchasing. Realtors typically have a heads up before some homes are even listed which can give you a leg up on the competition.
  • You want to work with a lender who finds solutions: Oftentimes when you want to move fast, setbacks can happen if you don’t have everything already lined up with your lender. You want to work with a lender who can point you in the right direction to get a smarter mortgage.

With an experienced team guiding you through this crazy market, the home buying process will seem far less daunting.

Become a Certified Home Buyer

A pre-qualification and a standard pre-approval typically don’t provide enough leverage to win an offer in a bidding war. Ultimately, it comes down to the underwriter of your mortgage for final approval on closing day.

The best way to ensure you’ll get to the closing table without surprises is to become a Churchill Certified Home Buyer. This means your loan is pre-underwritten before you find a property. All your paperwork is done upfront and there’s less stress when it’s time to make an offer on a house. Once you know the property address you’d like to make an offer on, we just need to make sure the home meets the guidelines of your loan.

This also helps when you’re trying to make an offer on a house and competing against dozens of other home shoppers for your dream home. Once you’re certified, your Home Loan Specialist can give you a Certified Home Buyer letter to share with your Realtor® to help you stand out from other home buyers. This letter is better than a pre-qualification letter and a pre-approval letter combined!

 

 

I Want to Become a Certified Home Buyer

 

Waive Contingencies

Sellers don’t want to relist their homes because a sale fell through due to a contingency, so by waiving certain contingencies, you have a better chance of getting your offer accepted.

Contingencies are conditions that need to be met before the sale of a home can be finalized. Examples of contingencies are:

  • Financing contingency: This gives the buyer more time to lock in mortgage financing in order to purchase the property.
  • Appraisal contingency: Allows home buyers to back out of their contract if the home is appraised for less than the purchase price in the contract.
  • Home sale contingency: This allows the buyers time to finalize the sale on their current property (many people use the money from the sale of one home to put toward a new home).

It can be riskier to waive some contingencies over others. The appraisal contingency can be particularly tricky in this competitive housing market. The entire goal of the appraisal is to make sure the home you’re interested in purchasing is valued at (or near) the actual purchase amount.

What can get problematic is if the appraised amount comes in much less than the offer. The home buyer is then responsible for the gap between the two amounts. By dropping this contingency you’re telling the home seller that you’re able to pay the amount of the price gap in cash at closing. Ask your Home Loan Specialist about our Appraisal Gap Analysis and how it can help you.

Be Flexible

Sometimes the highest offer isn’t going to be what seals the deal. We know what you’re thinking… why wouldn’t a seller be interested in the offer that makes them the most money? Sometimes offers are from investors or house flippers and many people don’t want to sell their beloved home to someone who won’t be building a life there.

Others may be more focused on the closing date or just be interested in a lease back (renting the house back) so their kids can finish out the school year. This is why it’s important that your Realtor finds out what is really important to the seller during the home selling process.

Despite all of the challenges with the current housing market, it’s still a great time to purchase a home while mortgage rates remain low. As long as you have the endurance to deal with multiple offers on multiple homes, it will all be worth it when it’s said and done!

 

*https://www.blackknightinc.com/wp-content/uploads/2021/04/BKI_MM_Feb2021_Report.pdf
The Churchill Certified Home Buyer program is not a commitment to lend funds and is not an approval but is a conditional approval subject to your acceptance of the terms and the conditions being fully satisfied prior to closing. All conditions are subject to final underwriting and final investor approval. The certification is subject to the financial status and credit report(s) of everyone on the application remaining substantially the same until closing, an acceptable contract of sale on a suitable property, collateral (the appraisal, title, survey, condition, and insurance) satisfies the requirements of the lender and loan selected is still available in the market. All closing conditions of the lender must be satisfied

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