How To Get Your Offer To Buy A House Accepted In Today’s Competitive Real Estate Market In Phoenix, AZ
Mortgage Banker
Richard Blair
Published on May 4, 2021
Buying a house in 2021

How To Get Your Offer To Buy A House Accepted In Today’s Competitive Real Estate Market In Phoenix, AZ

What To Expect When Buying A House In Phoenix, AZ In 2021

Arizona is a very competitive market for a first-time homebuyer, and it’s not atypical for the seller to be able to choose among multiple offers from different buyers. With mortgage interest rates at historical lows, there are record numbers of current home or apartment renters looking to own their first home. It can be frustrating to write numerous offers on different homes and not be selected time and time again. Your offer needs to stand out from the rest! An experienced real estate agent and mortgage loan officer can help you structure your offer to stand out among the crowd! Contrary to popular belief, when it comes to making an offer on a house, it is not always just about price. We will reveal 5 proven strategies that will help you write a winning offer for your dream home the first time -saving you time and helping avoid frustration.

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Strategy 1: Work With A Local, Experienced Mortgage Broker Or Mortgage Banker For A Pre-qualification That Will Help You Submit A Seller “Friendly” Offer.

Every seller wants to put the most amount of money in their pocket from the sale of their home. In a competitive market, you won’t want to ask for the seller’s help towards closing costs. This takes away from the seller’s cash at closing and makes them less likely to accept your offer, especially when there are multiple offers. Your mortgage loan originator can explain different strategies for structuring your home mortgage to take this into account. For instance, your loan can be designed to have a slightly higher mortgage rate so you will receive a credit towards some, or all, of your closing costs without asking the seller for a contribution. This can be offered whether you are looking at 30-year mortgage rates or 15-year mortgage rates.

Strategy 2: Show The Seller You Mean Business By Presenting A Pre-Approval Letter From Your Mortgage Loan Originator.

Whether you are working with a mortgage banker or mortgage broker you need to be ready to move quickly and aggressively in this market. Presenting a pre-approval letter from your mortgage loan officer shows that your credit has been reviewed together with all the other required financial documents including income and assets. Pre-Approval means that the mortgage loan originator has gone the additional step and your loan was actually submitted to an underwriter, reviewed, and issued a conditional approval. This extra step by your mortgage loan originator will prove that you are a committed buyer – someone who has not done the bare minimum for just a credit pre-qualification. Sellers are looking for serious buyers. Not all mortgage brokers or mortgage bankers will offer this service, so ask this question of your mortgage loan officer right up-front before applying for a loan. In fact, if the mortgage banker or mortgage broker can also declare that the lender has verified assets needed to close it shows the seller that you are a serious buyer, qualified, and ready to purchase. It also shows the Seller you have committed to your lender and therefore the process will move quickly once there is an accepted purchase contract. Sellers become very anxious when a buyer starts rate shopping with different lenders after the purchase contract has been signed and then tries to switch to a different mortgage banker or mortgage broker.

Strategy 3: Speed Of Closing, Not Just Price, Is Crucial To The Seller When Weighing Multiple Offers From Home Buyers.

In this competitive market, an experienced listing agent will look at the name of the mortgage lender with an eye towards speed of the process. If the listing agent sees it is a large bank or out-of-state-nationwide mortgage banker then the buyer’s offer could be downgraded in the speed category. Before you choose a mortgage banker or mortgage broker ask the mortgage loan officer their average time to close a purchase transaction from start to finish. To be even more competitive, consider choosing a local mortgage lender that is familiar with the market where you are buying and capable of shortening the timeline – if everyone else is offering to close in 30 -45 days, offer a 21-day close. If that is best for the seller’s timeline, it may be the difference-maker that is actually more important than just price.

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One part of the lending process that can delay a closing date is the scheduling of a home appraisal. Appraisers are very busy with this real estate market and if the appraiser cannot complete the report for 21 to 30 days, then your closing will be delayed. Ask your mortgage loan originator about their appraisal process and whether Rush appraisal reports are offered by the mortgage lender to speed the closing process.

The Seller is not only looking to close on time, but to close on time with the least amount of problems, drama and hassles. The experienced Listing Agent will check up on the Lender’s reputation for closing on time by reviewing social media sites for verified customer reviews. Make sure you are dealing with a mortgage loan originator and mortgage lender that have a recent history of 5 star reviews. Check reviews of your mortgage loan originator on social media sites such as Google and Social Survey before you commit to your mortgage loan officer.

Being able to submit your offer with a firm Pre-Approval from a highly rated mortgage broker or mortgage banker with a quick closing date is a formula for home buying success.

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Buying a home in 2021

Strategy 4: Write Your Best Offer- Don’t Low Ball The Seller.

If the seller has received multiple offers and your offer is a low-ball price, you probably will not get a counter or your offer may be shoved to the reject pile immediately. A low-ball offer is not only insulting to some sellers but creates the appearance that you are not a serious buyer. Remember you are not buying a car- this will be your home. You can add an escalation clause to your offer, with which you agree to ratchet up your offer if there’s a higher bid from another buyer. Keep in mind that if you agree to pay more than more than the market value determined by an appraisal, you’re on the hook for the difference from your own funds. Ask your mortgage loan officer to explain the options that may be available if there is a gap between the appraised value and the purchase price. In this market some sellers are asking home buyers to waive their appraisal contingency- this is risky for a home buyer unless you have a very large down payment.

Strategy 5: Think Outside The Box & Be Ready To Compromise.

When submitting an offer the Realtor will ask you to write a check for Earnest Money. The Earnest Money is a deposit that represents a buyer’s good faith to buy a home. Think about adding some additional earnest money to your offer over and above what is customary for your local community. If everyone is offering $1,000, offer $2,500 to set you apart. This shows the Seller you are serious about completing the transaction. Your mortgage loan officer will credit any Earnest Money paid upfront towards your down payment requirement.

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Stay open-minded when writing your offer and be prepared to compromise on certain areas to differentiate your offer. For example, a home buyer may be willing to compromise on the occupancy date and let the seller stay in the home for a period of time after closing. This may create a winning offer if the timing to move out was more important to the seller than the highest price. Try to learn what the seller’s motivation or reason for selling is and find a compromise point that may help the seller.

Buying a home in 2021

Conclusion

A combination of record low housing inventory together with high buyer demand because of low mortgage rates has resulted in a very competitive home buying market. Preparing to win in this market means you need a professional team to work with and navigate. That means a local, experienced mortgage loan originator, a mortgage lender with a five-star reputation that is built on speed, technology and efficiency plus an experienced real estate agent. A great Team together with an iron-clad pre-approval, rather than a prequalification, can make a difference. A Mortgage Pre-Approval, in other words a fully underwritten lender approval, together with following the other strategies discussed, will give you a competitive edge and help you become a successful home buyer. Contact us today at Richard Blair Mortgage Team so we can help you get pre-approved and be ready to pounce when your dream home hits the market!

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