By Pamela Patterson
Nov 25, 2012
Q: How can a first-time homebuyer compete in a multiple-offer environment?
A: It is wise for homebuyers to have financing in place before beginning their housing search. Having proof of funds and a pre-approved letter from a mortgage broker shows a homeowner you are a serious buyer and ready to take action.
When faced with a multiple-offer situation, there are a few appealing points that first-time homebuyers can highlight.
For example, they will not include a Hubbard clause — a form of contingency that states the buyer’s home must be sold in order for the purchase of the new home to take place — into their offer. This indicates that cash is freed up. Plus, without a home to sell, many first-time homebuyers can be flexible on a closing date.
A seller’s choice of purchaser will come down to two points: price and terms. In a seller’s market, price is king.
In a buyer’s market, the terms of the deal can make all of the difference. In this case, buyers may want to avoid asking for personal items or for money toward closing costs.
Limiting the number of contingencies in an offer can catapult that first-time homebuyer ahead of the pack. In a multiple offer situation, buyers must be prepared to make a counter-offer. — Pamela Patterson, sales associate, Al Filippone Associates , 203-610-3677 or 203-256-3264, firstname.lastname@example.org