If you are house-hunting in Orlando recently, you know the dramatic change we have experienced here and how is the buying and selling market right now. We have seen with surprise, how since approximately July 2020 and during this year 2021, there has been a huge increase in demand, and how the inventory decrease every month. Is what we call a solid “Buyers Market”.
This means that there is a great demand to buy properties, and that the prices are going up, and because of this, the sellers set their guidelines for the negotiation of their properties. On the other hand, it also means that buyers are less able to negotiate and it can be very difficult for many to obtain the property they want. In other words, there are a lot of buyers competing for a low inventory of homes.
Before making some recommendations, I want to explain why this has happened in Orlando and in many other cities in Florida. Beyond the lowest level in the history of mortgage rates, the coronavirus pandemic has caused big changes in the jobs scene. Fortunately, many people were able to keep their good jobs, although sadly many lost them.
But those who kept their jobs now have more flexibility, and employers in the United States, as in many other parts of the world, are allowing them to work remotely, without having to be in the office. That’s why many have found in these months, the perfect time to move where they have always wanted, without having the need to leave their jobs, eliminating the uncertainty of having to look for a new job. They also are moving with their ability to buy a property immediately in some cases, before moving out. Fantastic, right?
And you already know that Orlando is a great favorite moving destination for people of all ages. It’s amazing how many families of all ages or individuals have made Orlando and nearby cities their home in recent months. During these times, a majority of new comers are from California, New York and Boston, among other US cities, where they had more expensive properties, which they have sold and come to buy beautiful residences at very good prices for them.
That has dramatically raised the demand to buy existing or under construction properties and has brought the inventory of available properties to its lowest level since the Orlando Regional Association of Realtors (ORRA) began keeping track in 1995.
As a result of this, there are many buyers for each property, and in most cases, when a house is for sale, the first day, listing agents can have several showings. And also in most cases there can be several offers, the same first day or very quickly. This has caused anxiety and disappointment in many buyers who have not been able to obtain the home they want. That is why I want to guide you on one of the most fundamental parts of the purchase process: the offer.
The offer is the document that is filled out once you find the house you want and with which you tell the seller that you want to buy it. It is not just presenting an offer document, you must win the offer in order to purchase the home. You should have the approval of the seller and then you enter into a formal purchase contract. After that, if the whole process goes as it should, the closing will be done and you will enjoy your ideal home.
But right now, that’s not easy. It is not only enough that you like the property, that you have the money or are qualified to buy it. You have to prepare a good purchase offer to try to buy the property. Here are some recommendations for submitting a winning offer:
1-Analyze your current financial situation and the type of home you would like and you can buy. With this, you should have an idea of the estimated price that you would be willing to pay, leaving a margin of flexibility, according to the current market value.
2-Consult a local real estate agent. With your agent you can discuss the elements of point # 1, and clearly define the features, specifications and price of the property you are looking for. We are experts in Orlando and surrounding cities and will be glad to help you. There is no time to lose!
3-Have a pre-qualification letter from a mortgage institution with the amount that you are qualified and the type of loan. If you are a cash buyer, have a bank statement that reflects the money in your account. Keep in mind that currently most sellers didn’t accept an offer that does not included a pre-qualification or proof of funds. To get a pre-qualification from a lender is an easy and fast process and have no cost for you.
4-Once you find the property you want to buy, don’t waste time. Evaluate the pros and cons of the property, and if you like it, submit the offer immediately. If you take a few days to think about it, when you take the decision, the property should not be available.
5-Analyze and discuss with your agent, the price of similar properties sold in the community (comparables), so that you can offer the price that seems reasonable to you.
Not only that, it’s very important that you write your very best offer. And yes, sometimes this means offering more money than the price at which it is being offer for sale. If the seller has multiple offers, probably will not consider low offers and didn’t present you a counteroffer. We have already seen this in Orlando, the homes often sells for more than list price. But be careful, a good offer does not only refer to the best price. Continuing reading to see what this is about.
6-A winning offer must have all the required documents, and if you have any contingency in the contract, such as that you will need to sell your house to close the purchase of this other, present evidence of that.
But in this competitive market, if you can waive some contingencies, do it. For example, see if you can qualify for a loan even without selling the current property, as this will offer less risk to the seller if they accepted your offer. Of course some contingencies should not be ignored, such as the right to inspect. What you can do is shorten the inspection period, typically from 15 days to seven days, showing the seller that you are willing to quickly close the sale.
7-Have your earnest money deposit ready, so that once your offer is accepted, you can send it to the Title Company that the seller designated. You should deposit the money during the time that the contract shows.
8-In this seller’s market, it is not usual to receive incentives from the seller’s side, as we had before, such as a contribution for the closing costs. You can always request it, it is your right, but it could be a disadvantage against another buyer who does not request it. The exception to this is the newly built properties but for those new communities, is usual to find a waiting list.
9-If you can buy cash, do it. The seller might consider it against other offers because cash transactions are faster and easier and in the other hand, you’re going to save time and money in the closing costs.
10-Having to take a quick decision does not mean that you don’t need to think twice or carefully analyze your purchase. Buying a property represents your biggest financial investment and a great responsibility. But if before finding your house, you are well oriented about the types of communities, you are sure about the requirements that the house should have, your responsibilities as an owner and the price you would be willing to pay, once you find it, do not lose it! !
If you want to make a winning offer for a property, contact me at firstname.lastname@example.org or call 407-922-4620 today.