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Summary: Real estate markets across the state of Washington are highly competitive, as inventory continues to fall short of demand. This is something home buyers should keep in mind when making an offer to buy a house in Washington. This article will go into more detail about making an offer on a home in Washington.
Limited supply. Strong demand. That’s the current situation in real estate markets across the country — and especially within Washington’s major cities. As a result of this imbalance, home buyers often have to compete with other buyers for the same property. Multiple offers and bidding wars are common in Seattle and other major cities in the state, where inventory is tightest.
So, what’s a home buyer to do? How do you make your offer stand out over others? Here are some strategies you can use when making an offer to buy a house in Washington.
1. Understand the supply and demand situation.
A “balanced” real estate market has about a 5- or 6-month supply of homes for sale, according to housing analysts and economists. Most major cities in Washington had less than a 2-month supply, during the spring of 2020. In Seattle (one of the tightest markets in the country), there was roughly a 1-month supply of homes for sale as of May 2020.
For home buyers in Washington, this means several things. Buyers will want to be financially and emotionally prepared for the house-hunting process, so they can move quickly when the right property comes along. These conditions also underscore the importance of making a strong first offer, especially in real estate markets where multiple offers are a common occurrence.
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2. Review recent sales prices in your target neighborhoods.
In a fast-moving real estate market, you don’t have a lot of time to analyze the price of every property that comes onto your radar. You have to move quickly. So it’s important to do some basic market research before you enter the housing market.
Recent sales prices are one of the most important things a buyer should review before searching for a home. This knowledge will help you evaluate the seller’s asking price in a timely fashion, and make a strong offer when the time comes.
3. Accept that sellers have more negotiating leverage.
Most housing markets in Washington — and especially those in and around major cities — currently favor sellers over buyers. That’s just a real estate reality. When there’s very little supply but steady demand, you have a classic seller’s market. If you accept this reality early on, you will have an easier time making a strong offer on a home. And speaking of offers…
4. Make a strong and timely offer, backed up by comparable sales.
In a sluggish real estate market, home buyers might be able to “lowball” the seller to get the negotiations going. There’s a good chance the seller will come back with a counteroffer. Buyer and seller can then go back and forth until they agree upon a sale price.
But it doesn’t work that way in a fast-moving real estate market like those in Washington. In an active market, you’ll want to make your first offer as strong as possible. This is where that market research mentioned earlier comes back into play. You can use the sale prices for comparable homes to support your own offer.
5. Consider writing a letter to the seller.
A study from a national real estate company revealed some interesting insights about home buyers who compete in bidding wars. The study found that writing a personal letter to the seller increased the home buyers’ chance for success by 52.2% (in a multiple-offer scenario. Waiving certain contract contingencies also gave buyers and edge, according to the study.
Do you have questions about mortgages? Or are you ready to buy a home in Washington and want to apply for a mortgage? If so, Sammamish Mortgage can help. We are a local mortgage company serving borrowers in Washington, Oregon, Idaho, and Colorado. We offer many mortgage programs with flexible qualifcation criteria. Contact us today with any questions you have about home loans.
There are more than a few ways that buying a home builds wealth and thus is one of the best ways for you to invest in your financial future.
S&P Case-Shiller Home Price Indices reported the fastest pace of U.S home price growth since 2005.