The pandemic era has been defined for many real estate markets by tight competition. For buyers and sellers hoping to make the most of these conditions, there are a few important best practices you should be keeping in mind.
Win competitive real estate with the means to secure offers and make lucrative investments. These five tips will help.
1. Formalize offers and backup offers.
In the course of securing an offer amidst strong competition, homebuyers cannot afford to cut corners on any part of the process. Similarly, sellers shouldn’t accept anything less than protocol. This includes formalized backup offers. A backup offer waits on standby to take over should any contract issues with other buyers come up. Then, the seller can instantly turn back to you with a backup.
From here, winning competitive real estate is much easier. You integrate automatic catch-alls into the competition. As a result, sellers can seamlessly complete real estate transactions.
2. Use contingency periods to your advantage.
Many real estate markets across the U.S. have legally dictated contingency periods required of home purchasing contracts. These are periods in which inspections and repairs can be completed and negotiated. In other markets, contingencies are just good business. That’s because they allow buyers to walk away from a large financial commitment if a major maintenance problem or similar issue is found.
For you, adjusting your contingency periods may play out to your advantage. If you can afford the risk and want to break into the market, shortening these periods can be a good way to get seller attention. But be careful: cutting corners invites risks. You may find yourself with a costly renovation on your hands that eats into your ROI.
3. Use a notice to perform to speed UP the process.
Contingency periods are built-in speed-bumps for the home buying process. But sometimes you need the opposite. That’s what a notice to perform is for.
A notice to perform is a form real estate agents can use to issue an ultimatum during the escrow. This gives the seller a certain time frame to complete conditions or the contract is voided. These are great for speeding up a stalled transaction.
A buyer or seller can issue a notice to perform just about any time an expected aspect of the transaction isn’t moving forward. These commonly include instances such as:
The initial deposit hasn’t been received
Contingencies aren’t being met or removed
Information or resources are needed from the sellers
A notice to perform can speed the process along and even ensure the successful completion of inspections and appraisals. However, there are times when more is required.
4. Consult with legal and finance professionals.
For developing winning strategies in every real estate transaction in which you get involved, the insight of more than just a real estate agent is desired. While these agents offer expert assistance through the complex process of homebuying, there are greater legal and financial considerations to think about as well. Consultations with legal professionals may be necessary should a deal stall or mediation becomes warranted. Sometimes, mediation is the best way to cut legal costs and streamline a transaction.
Additionally, financial experts will help you make the most of your investments. These professionals know the ins and outs of tax deductions, borrowing terms, and more. Leverage this insight as you build a winning real estate team.
5. Build a winning real estate team.
Success in real estate investment is too hard to achieve on your own. Instead, bring other experts into the process. As a result, you’ll reduce risk and maximize potential value from the transaction. Start by evaluating your overall goals as an investor. Perhaps you’re simply looking for a family home that will grow to fit your needs over time. Or perhaps you’re looking for financial freedom through passive income.
Regardless of your goals, the right real estate team will help you succeed. This means legal, financial, maintenance, property management, and other professionals experienced in cultivating value from a real estate purchase.
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