It’s a sellers market in Brooklyn. What does that mean?
- there are more buyers than there are sellers
- finding a single-family home can be difficult for the home buyer
- great homes sell quickly, just days after listing
- bidding wars
- sellers are getting more than their asking price and receiving multiple bids, too
- home prices increase as time passes by
If you’ve been shopping for a new home in today’s sellers market in Brooklyn, you probably know just how difficult it can be to win a great home. Try these 7 things to win a great home in a sellers market in Brooklyn:
Look at things from the sellers’ perspective.
To win a great home in a sellers market in Brooklyn, you must appeal to sellers. It helps to look at things from a sellers’ perspective.
- Sellers are spending a lot of money for two real estate agents and closing costs. If another potential buyer has already offered a bid on a great home, don’t offer a lower bid. You won’t appeal to the sellers with anything less than what has already been offered. Give the sellers a fair bid right away.
- If you’re missing out on great homes because they sell quickly, start looking at homes that have been on the sellers market in Brooklyn for a month or longer. Homes that have been overpriced won’t receive many bids if any. This frustrates sellers. They will be willing to take less than their home is worth and begin dropping the price. This is the time to put in a fair bid!
- Most sellers will choose the bid that will close the quickest, especially if their home is vacant. When a home is vacant, it’s costly to sellers. They are still paying a mortgage and spending money to move and rent or buy another home.
- Mortgage brokers can close the offer on a home in 2 or 3 weeks. Banks take 4 to 6 weeks. Let the sellers know that you can close faster than everyone else who is bidding on their home. After you place your bid, have your mortgage broker call the sellers and tell them you can close in 2 or 3 weeks.
- If the home is not vacant, your Brooklyn real estate agent should ask the sellers when they would like to move. Set the closing date for when the sellers would like to move. Sellers want to move conveniently on their schedule. If it will make the sellers’ move easier, offer to rent the home to them for a few weeks.
- Consider writing an escalation clause into the contract, but be careful. It can turn around and bite you! Some real estate agents will reject your bid and counter it with your highest stated bid. An escalation clause states that you will pay X number of dollars over the highest bid up to a maximum of X number of dollars if proof of the highest bid is shown.
Show sellers you are serious about your bid on their home.
Sellers don’t want to deal with glitches or hang-ups when closing on their home. They dread having to pay out-of-pocket to fix a lot after inspections have taken place. Show the seller you are serious about your bid. Choose to opt out of the contingency that states the buyer can have an inspection done and back out of contract for any reason during the inspection period and get their earnest money (or deposit) returned. This shows the seller that you are serious about your bid, because you can lose your earnest money if you back out of the contract. If you do choose to opt out of this contingency, make sure you add this, or something similar, in the contract: “if cumulative repairs are over X number of dollars, the potential buyer may still back out if the seller doesn’t do the repairs.” Give the sellers peace of mind in exchange for a lower price.
Send an approval letter with your bid on a home in a sellers market in Brooklyn.
A pre-approval or pre-qualification letter states that you can get a loan. An approval means you have already been approved for a loan. All you need is an address to on the loan.
It’s best to work with a mortgage broker on the following since most banks won’t do this for you. Have your lender send an approval letter with your bid to the sellers. This approval letter should have already gone through the underwriting process. Don’t send a pre-approval letter or worse yet, a pre-qualified letter, with your bid to the sellers. This will not appeal to the sellers. Instead, put in a bid and have your mortgage broker call the sellers’ real estate agent. Your mortgage broker should tell the sellers’ real estate agent that you have already been approved and explain why that benefits the sellers.
Put more money down on the home.
A larger deposit or escrow money shows you have more to lose if you back out of the contract. It shows the sellers you are a serious buyer. If you don’t back out of the contract, you’ll get back all that is in escrow.
Pay cash for everything.
An all-cash bid in a sellers market in Brooklyn is very appealing to sellers. Most will go with an all-cash bid over even the highest bidder. All-cash buyers appear serious because they have more to lose. Cash buyers are able to close a deal in two weeks, which makes them even more appealing to sellers. A good mortgage broker and an approval letter let a seller know you can close in two weeks.
Make your desire to purchase a seller’s home personal.
If you’re just numbers on paper, then you’ll have to be the biggest numbers on paper to win a great home. Write a letter to the sellers. Tell them how much you love their home. Tell them how their home will benefit you and your family to live there. Everyone enjoys feeling like they are helping someone. Sellers want to feel good about the next family moving into their home.
Here’s an extra-special gesture to help you win a great home in a sellers market in Brooklyn. Have your real estate agent ask the sellers an open question about what they want. You’re looking for something important that will help the sellers and increase your chances of winning the bidding war on their home. What seller wouldn’t want to work with a buyer who cared enough to ask and make changes that would help them? One question could help you win a great home and make the sellers happy you asked.
Find homes before they hit the sellers market in Brooklyn.
If you can find homes before they hit the market, you’ll save yourself time and money.
- Drive around neighborhoods in areas you are interested in living. Look for large remodels or construction on existing homes. They may be getting ready to list their home for sale. You may be able to save some money by buying that home early.
- Ask your real estate agent to send cards to owners who have lived in their homes for 7 to 10 years in an area you are interested in living. Ask if they are interested in selling. Your lender’s contact information should be listed on the cards. Owners who are interested in selling will be able to call your lender and verify that you are a real buyer.
- Ask your real estate agent to email other agents they work with to see if they have any homes coming up that you might be able to see before other buyers.
No, you don’t have to pay the highest price to win a great home in a sellers market in Brooklyn, although it helps. Just try these 7 things when shopping today’s sellers market in Brooklyn and win YOUR great home!
Time is money. Get the help of Charles D’Alessandro. He has over 25 years of experience and is active in the Brooklyn real estate market. He knows how to help you win a great home in a sellers market in Brooklyn. Contact Charles D’Alessandro of Fillmore Real Estate in Brooklyn at (718) 253-9700 ext. 206 or [email protected].