Inventory in the Pittsburgh markets is lower than usual, and many buyers are finding themselves in bidding wars over properties in every neighborhood.
There are many tactics you can use to set yourself apart from other buyers, but a deep understanding of the local market and real estate contract knowledge can be the most effective way to capture the perfect home once it’s found.
Find the right Realtor.
“Use a savvy Realtor® who understands the local market, understands escalation clauses or other tactics to improve your offer, and be prepared to move quickly if you find something that strikes your interest,” says Will Clauss, president of the Pike-Wayne Association of Realtors®. A Realtor that is a local expert can assist you in deciding when you need to offer more for consideration to beat out the other offers in your area.
Be prepared to be flexible.
Will Clauss continues, “I tell buyers that I’ve had other buyers not find what they want when looking at the existing home inventory, so they decided to build. And they still didn’t get their house exactly as they want. So, unfortunately, there’s no perfect house out there. However, I used to tell them if something checks 80-90% of your boxes, it’s something worth strongly considering. In this market though, that has shifted to if something checks 70-75% of your boxes, you might want to seriously consider making a move if you are serious about buying a home.”
Get ready to put more money down.
Kathy McGuriman, president of the Montgomery County Association of Realtors® said there has been an influx of bidding wars in lower-priced homes in the area. The lack of inventory has created a very competitive market in our area, which is typically pretty stable. In highly sought-after neighborhoods, there are bidding wars on most residential and many multi-family dwellings.
To combat this, successful Realtors may suggest using the Price Escalation Addendum (PEA). Attaching Form PEA is not a magic bullet that somehow overrides all the regular negotiation rules, but for most sellers, money talks. For instance, a homeowner who has listed their home at a price of $300,000 may not be very enticed by a first offer of $310,000 when a second offer of $330,000 comes in. But a well-worded escalation clause phrased for an escalation of $1,000 up to $330,000 turns the first offer into $331,000. For a seller looking to make a great return on their investment in a home, the first offer is now likely the best one available!
There is never a guarantee that the offer with the highest purchase price will be accepted in any transaction. A seller has the right to accept whichever offer they want, and if they don’t want the offer with the escalation addendum, they are free to accept another one regardless of the price. However, for a buyer with budget flexibility, it can be the best choice to guarantee their ability to purchase their dream home.
If you’d like more information about how bidding on a home, the local housing market, and buying your dream home with The Dallas-Fincham Team, reach out to one of our talented agents! Reach out via call to our team lead Rich at 412-965-6387 or email Rich@DallasFinchamTeam.com.