Hopkinton, MA:

This Single-Family in Hopkinton, MA recently sold for $1,120,000.
This is a Colonial style home and features 11 total rooms, 4 full baths, 1 half bath, 4 bedrooms, 1.21 acres, and was sold by
Chuck Joseph – RE/MAX Executive Realty

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In a competitive housing market–like the one we have today–sellers are fielding numerous offers, especially in desirable urban and suburban hubs.

If you’re hoping to buy your first or second home, it can be tough to make offer after offer with no success.

However, there are some things you can do to help ensure your time house hunting is well-spent and to increase your chances of getting your offer accepted.

In today’s post, I’m going to give you a few tips on how to win a bidding war on your dream home.

All-cash offer

The most effective way to ensure that your offer is accepted is to make it in all cash. Cash offers drastically simplify the real estate transaction process, making things easier on the seller.

Most buyers, especially first-time buyers, won’t be able to make an all-cash offer on a home. However, people who are downsizing after their children moved out or are buying a retirement home may find themselves in the ideal financial situation to be able to leverage a cash offer.

If that sounds like you, consider a cash offer as part of your bidding strategy.

Waive the financing contingency

If you’re new to real estate contracts, you might be wondering what a contingency is. Essentially, a contingency is an action that needs to be completed before the contract becomes valid and the sale becomes final.

There are a number of different contingencies that can be found in a real estate contract. However, the most popular are for inspections, appraisals, and financing.

If you’re planning on taking out a mortgage to purchase the home, a financing contingency protects you in case you aren’t able to secure the mortgage in time. In other words, you’re not on the hook for a home you can’t pay for.

In some special situations, buyers might decide to waive the financing contingency, signaling to the sellers that there won’t be any hang-ups or delays from the buyer regarding financing the home.

Waiving this contingency comes with risks (namely, being responsible for coming up with the money to pay for the home). However, there are ways to safely waive a contingency.

The most common approach is to get a fully pre-approved letter from a lender. The important distinction here is that your mortgage needs to be pre-approved and underwritten (not just pre-qualified), otherwise you again risk getting denied the mortgage in the last moments before buying your home.

Crafting a personal letter

Sometimes all it takes to win a bidding war is to be the seller’s favorite candidate. Take the time to write them a personalized letter. Explain what you love about their home and why it’s perfect for your family.

Avoid talking about big changes you’ll make. Remember that they probably put a lot of time and money into the home, making it exactly the way they want it, and won’t appreciate you making huge plans to undo their work as soon as they’re out the door.

Using one, or a combination of, these three techniques, you’ll be able to give yourself an edge over the competition and increase your chances of getting your offer accepted.

Hopkinton, MA:

This Single-Family in Hopkinton, MA recently sold for $1,135,000.
This is a Contemporary style home and features 11 total rooms, 4 full baths, 1 half bath, 4 bedrooms, 1.13 acres, and was sold by
Chuck Joseph – RE/MAX Executive Realty

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 Photo by Steve Buissinne via Pixabay

While real estate has ups and downs, it has generally been a good long-term investment. Owning a home is one way of investing, but to really take advantage, you can buy property that you won’t necessarily occupy but will make you some money.

How Real Estate Makes Money

There are two basic ways. You can rent out your property, or you can sell it for more than you paid. The latter usually involves improving the property and then “flipping” it.

Before you start making offers on potential rental or flippable property, think about what you hope to accomplish. Are you going to be a landlord or a flipper? The two require different attitudes and skills. While it’s certainly possible to combine the two – to buy a building to fix up and rent, or to rent something you will eventually sell – most people focus on one or the other.

Getting Started

In either case, it’s wise to start small. You may aspire to own an entire apartment complex and rent to a building full of tenants, but it’s better to start out with a single unit and learn to meet the challenges of being a landlord. One hands-on way is to buy a duplex, live in one half and rent the other. If you’re a flipper, you might want to eventually manage a renovation team restoring houses all over town, but you’re better off to cut your teeth on just one.

If you’re a novice, you’ll want to buy locally, and you’ll need to understand real estate trends in your community. Which neighborhoods are changing for better or for worse? How are prices moving? Does the market favor buyers or sellers? Remember, locals trends can be different from national ones. What percentage of available rentals markets are occupied? If occupation rates are high, it’s easier to find and keep tenants.

You can scour local listings yourself, but you’ll do well to consult a real estate agent who understands the market and local rentals. It’s best to work with a banker and have financing in place before you start.

Be realistic about projecting your revenue and expenses. Renovations often cost more than you’d predict. Rental upkeep can be expensive. Eventually you’ll need to upgrade appliances and replace the roof.

If you’re going to be a landlord, decide how hands-on you can be. Can you make repairs yourself? Are you willing to locate tenants and deal with them on an ongoing basis? If not, hire a property management company to take care of day-to-day management.

Investing at a Distance

You don’t have to buy a property and take on the associated headaches to profit from real estate. A vehicle such as real estate investment trust (REIT) or crowdfunded real estate makes you a part-owner of a large real estate investment. Someone else selects and manages the properties. It’s similar to buying stock. You (and others) provide the money, accept the risk and potentially enjoy the profits.

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