Local city dwellers hoping to make it official with a home purchase: Prepare yourselves; it’s a battlefield out there.
In big cities like Las Vegas, San Francisco, San Diego, Los Angeles and Atlanta, home prices have climbed 16% or more in the past year, compared to the national average of 13%, CNNMoney reports. Sin City tops the list with a whopping 24.9% increase.
Hopeful homebuyers are also growing increasingly frustrated as aggressive, all-cash bids sweep their offers. The majority of the winners in some of these hot markets? Foreign buyers and Wall Street brokers with bonus checks in New York and tech workers in the Bay Area are keeping competition cutthroat and cash-heavy. According to RealtyTrac, about 35% of all offers nationwide were in cash in February, an almost 30% increase from 2013.
This bidding-war culture can seem daunting, causing many prospective sellers to delay putting their houses on the market altogether, in fear of being unable to find a new one. For those willing to put up a fight, however, there are ways to avoid getting muscled out by competition.
Be first, and be quick. Make sure your buyer’s agent knows you’re willing to jump on any new properties as soon as they go on market. When you make an offer, attach a short deadline to avoid an impending bidding war. Be sure to complete a home inspection ahead of time so your offer isn’t inspection-contingent.
Prove you’re pre-approved for a loan. Not in a position to make an all-cash offer? Have a letter prepared from a lender stating you are qualified for a loan, plus a 20% down payment (at least). You’ll be ahead of the game by proving you’re serious about the offer.
Accommodate the seller. While the buyer’s market is a numbers game, remember sellers are people, too, looking for minimal hassle. If any accommodations can ease the stress of the seller’s transition, it could tip you in the right direction: Offer to pay utilities until closing of escrow, or allow flexibility in the closing date if the seller wants to move out quickly or needs more time to find a new home.