Understanding how to successfully buy in a seller’s market is essential to snagging your dream home. Here are ways to make your offer stand out in the competitive New Orleans real estate market.
6 Ways New Orleans Homebuyers Can Get a Seller’s Attention
You’ve found your dream house in New Orleans and you’re willing to pay the price. But house hunting in a seller’s market can mean that even a full-price offer might not be enough. Here are some ways to make your offer stand out and seal the deal:
Offer Above the Asking Price
A seller’s market is not the time to make a lowball offer and hope someone bites. If you really want the home, you’ll need to make an offer that is high enough to win out in a multiple offer situation – likely one that is above the asking price.
Get Preapproved for Your Mortgage
Getting prequalified, which only verifies your income and how much a bank might agree to lend you, isn’t the same as getting preapproved for a mortgage. If you get a preapproval letter from your bank stating that they have underwritten your application and are ready to lend you the money, you will be able to move quickly when you find the NOLA home you want to buy, and the seller will know you’re a serious buyer.
Consider Waiving the Appraisal
In neighborhoods that are experiencing a boost in popularity and home values – in New Orleans, these up-and-coming areas include Gentilly, the Ninth Ward, Meraux, Irish Channel, and Pontchartrain Park – you have to act quickly; an offer to buy a home before appraisal will set your offer apart from others. But this can be a financially risky move, so make sure your budget can take it before you choose this strategy.
Make a Larger Down Payment Than Required
If you put at least 20 percent of the purchase price down on a home, you won’t have to have private mortgage insurance. It also means you’ll have smaller monthly payments, could get a lower interest rate on your mortgage, won’t pay as much interest over the life of the loan, and generally improve the odds that your offer will be accepted. However, be aware that a large down payment means less money in your pocket to make potential home improvements and repairs.
Add an Escalation Clause to Your Offer
If you include an escalation clause in your purchase offer, you will automatically be able to outbid others up to a ceiling cap, (the maximum price you will pay). Typically used in a multiple-offer situation, an escalation clause indicates that you are making an offer for “X” amount on a home, with the understanding that if the seller receives a higher offer, you will increase your offer to “Y.” Escalation clauses can give you an advantage during a bidding war, but they also tip your hand by making the seller aware of exactly how much you are willing to pay for the home.
Don’t Make Your Offer Contingent Upon Something Else
Making your offer contingent, or dependent, upon the sale of another property, an appraisal, or a home inspection will slow down the process and add baggage to your offer that other buyers may not have. An offer with contingencies attached tells the seller that you might back out of the deal if something goes wrong, but these contingencies are put in place to protect you, so think hard before you decide to take the gamble by waiving them.
If you’re looking for a home in the competitive New Orleans market and want help getting the attention of sellers, our Realtors can provide valuable advice and guide you through a smooth property transaction. Contact our team to discuss your real estate goals and dream home.