New Jersey is a seller’s market, and homebuyers such as yourself are likely facing strong competition. Here’s our guide on how to make your offer stand out from other buyers’:
- Waive as many contingencies as possible
In a competitive housing market like New Jersey, having fewer demands and contingencies in your offer can make it more attractive to the seller. Your real estate agent can get in touch with the listing agent beforehand to establish rapport and ask key information about your seller. This includes everything from their preferred settlement date to their biggest concerns about selling their home.
According to the 2020 Profile of Home Buyers and Sellers New Jersey Report, the most commonly cited reason for selling a home was upsizing (home is too small), downsizing (home is too big), or moving closer to friends and family. This might mean that many home sellers are looking to avoid repair or closing costs to have a bigger budget for their move.
So, if you’re certain about the home you’re buying, you can consider purchasing it “as-is,” which relieves the seller from making any repairs or compensating for any issues with the property.
- Have mortgage preapproval
A buyer’s financing falling through is one of the biggest risks a seller faces during closing, and it is the first thing they will avoid when considering multiple offers. Make a strong offer by having a mortgage pre-approval letter from your lender, which specifies the loan amount they can offer you based on your credit history.
Since a preapproval letter can “expire” within 60 to 90 days, it will not only show the seller that you are a serious buyer with the financial capability to purchase the home. It will also show that you are willing to have a shorter mortgage contingency period.
In New Jersey, mortgage contingency periods typically last from 30 to 60 days. Pre-approval means your lender has already made an initial review of your finances, which can shorten the final financing process. If your seller is eager to sell and move out by a certain date, a shorter mortgage contingency period can make your offer more attractive.
- Give your best offer price (and earnest money)
Once you’ve established contact with the listing agent, your agent will probably have an idea on how tight the competition is. The opportunity to make a counteroffer is not guaranteed, so the first offer price you make should be your best. This requires in-depth research on the local housing market.
Bridgewater, NJ, for example, is a seller’s market with a median listing price of $575,000 and a sale-to-list price ratio of 105.33% (data from Realtor.com, as of June 2022). To put things into perspective, a home listed at $575,000 is actually sold for $605,647.50, or 5.33% above the list price.
If the Bridgewater home you want has multiple offers, a competitive offer price would be around 4% to 5% above the list price. You can also increase your earnest money – the “good faith” deposit you pay your seller when the contract is signed – from 1% to 5% of the sales price, which will give the seller extra assurance about your commitment to push through with the sale.
Having highly skilled real estate agents on your side is crucial when it comes to negotiating in a seller’s market. Our team at Pagnotta Homes know New Jersey communities like the back of our hand, and we can help you find –and secure – the home of your dreams. Contact us at 908.436.7947 or send us an email to get started! You can also send us a message here.