Buyer beware--of other buyers
Julie Garton-Good, GRI, DREI

You've found your dream house, so there's no doubt in your mind that you'll make a sound offer, have it accepted and live happily ever after--unless another buyer beats you to the punch.

In a competitive marketplace, not only can this happen, but also it may cause a far greater impact than any negotiating curve the seller could throw at you. Erroneously, more buyers fear the seller than they do competing buyers.

So let's evaluate why you should be alert to other prospective buyers. These tips will arm you with the best ammunition possible to clinch the sale.

Why beware of other buyers? In a competitive market with relatively few quality properties available, it stands to reason that the "dream home" category of homes will become truly hot properties--often the minute the Realtor's sign goes up in the yard.

  • Buyers today, for the most part, want to purchase a home that requires very little fixing up. "I want to bring in my toothbrush and immediately set up housekeeping" is the mindset of many buyers in the marketplace. And to obtain this turnkey benefit, buyers are willing to pay a premium. That can translate not only into a full-price offer, but also to one that exceeds the seller's listed price.
  • Secondly, in an active market, timing is everything. In the good old days, you might have had the luxury of viewing a home several times--even dragging your relatives to see it--before you actually made an offer. Today, the phrase "he who hesitates is lost" aptly explains the buyer who delays making a decision.
  • And don't forget that being preapproved for a loan has leveled the playing field for a majority of buyers. If they're all equally qualified financially, the best offer (as interpreted by the seller), gets the property.

So what can you do to arm yourself to the teeth with "added value" to attract a seller?

  • First, make sure you are financially preapproved/prequalified to purchase. Be prepared to document this to the seller. In fact, many lenders actually provide certificates to buyers, a copy of which can be attached to any offer you make to a seller.
  • Be honest with the seller about your interest in purchasing the property. This doesn't necessarily mean that you won't negotiate a fair purchase; but it also doesn't mean that you'll act nonchalant and non-committal either. Sellers often "choose" one buyer's offer over another based on the level of personal interest and commitment the buyer appears to have to the seller's home.
  • Finally, make sure you fully communicate the desired outcome to your Realtor. If he/she is a buyers' agent, negotiating on your behalf, outline to the Realtor just how much you want this house and what you're willing to do to get it. As a trained professional, he/she will then evaluate the best approach to take (in price, terms and negotiating tactics) to help you realize your goal.

The next time you're inclined to wonder what evil trick the seller might be up to, better look behind you first--to see if other buyers are actually pulling the rug out from under your dream home.