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Tips for Buying a Home in a Competitive Knoxville Real Estate Market
Dated: May 25 2023
Photo by Towfiqu barbhuiya on Unsplash
Sales in March 2023 were down 2.4% month over month and still down 22.0% year over year, according to the latest NAR Housing Snapshot. Despite these challenges, Knoxville Living Group at NextHome Makers City, a luxury real estate firm offering concierge-level service, is here to help you navigate the competitive market.
In this article, we'll provide valuable strategies and tips to increase your chances of securing your dream home. With inventory levels at historic lows and multiple offers on several of the properties locally, it's crucial to have a well-thought-out plan. Follow these expert recommendations to position yourself as the ideal buyer in price, terms, and reliability to close.
- Get Pre-Approved by a Trusted Mortgage Professional:
Before starting your home search, obtain pre-approval from a trusted mortgage professional. Being pre-approved strengthens your position as a buyer and shows sellers that you are serious and financially capable. Include the written pre-approval letter with your offer and have your mortgage professional available to provide reassurance to the listing agent and seller. We can't stress enough how important this step is. If you don't have a working relationship with a local lender, we are happy to provide you with a few of our favorites to interview.
- Make a Strong Initial Offer:
In a highly competitive market, it's important to make your best offer upfront. Starting with a low offer and gradually increasing it rarely works. Be prepared to put forward a compelling offer from the beginning to avoid losing out to other buyers. Remember, a 'low-ball' offer might discourage sellers from considering your contract altogether.
- Consider the Seller's Perspective:
Understanding the seller's motivations and priorities can give you an advantage. The listing agent calculates the expenses and net proceeds of different offers for the seller. Keep in mind that certain types of financing or repair requests can impact the seller's net proceeds, even if your offer is higher. Consider making concessions that make your offer more appealing to the seller without compromising your own interests.
- Streamline Contingencies:
Contingencies protect buyers from uncertainties but can be viewed as obstacles by sellers. Work with your agent to make contingencies as palatable as possible. Instead of waiving inspections entirely, opt for a short inspection period to minimize the time the property is in limbo. Provide a simple "accept or reject" response based on inspection results, rather than requesting repairs. We can discuss these in detail during a consultation.
- Flexibility in Closing and Possession Dates:
Accommodating the seller's desired closing and possession dates can make your offer more attractive. Research alternative options that align with the seller's needs, whether it's an earlier or later date. Your agent can help negotiate a flexible arrangement that appeals to the seller while meeting your own requirements.
- Increase Earnest Money Deposit:
Boosting your earnest money deposit demonstrates your commitment to the transaction. Consult with your agent to determine an appropriate amount, which can exceed the minimum requirement. Consider increasing the deposit after specific contingencies have been met to further showcase your dedication.
- Utilize Escalation Clauses:
Escalation clauses are a valuable tool in competitive negotiations. They indicate your willingness to increase your offer by a specified amount, up to a maximum, if another bona fide offer is received before yours is accepted. Discuss the use of escalation clauses with your agent, who can provide guidance based on their experience in similar situations. While escalation clauses don't work for everyone and some sellers won't entertain an escalation clause, it is a tool to be considered when you are competing for the home you want.
Buying a home in a competitive market requires strategic planning and the expertise of an experienced agent. The Knoxville Living Group at NextHome Makers City is dedicated to helping you navigate the challenges and secure your dream home. By following these tips, including getting pre-approved, making a strong initial offer, understanding the seller's perspective, streamlining contingencies, being flexible with closing dates, increasing earnest money, and utilizing escalation clauses, you can position yourself as the ideal buyer. Trust our team to provide concierge-level service and seasoned negotiation skills, ensuring your success in the competitive Knoxville real estate market.
We would love to provide a no-pressure consultation about our buyer's agent services.
Deanna graduated from the University of Tennessee, where she was a member of both the Equestrian and Horse Judging teams. Following graduation, Deanna joined a local restaurant company and worked as p....
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