How to Get a Real Estate Offer Accepted in Today’s Market

It is no secret that inventory levels across the country are extremely low and are contributing to current local market trends, namely rising real estate values. Stories can be found across the Internet, in newspapers, and on television about fierce competition between homebuyers that are struggling to get their offers accepted.

This article aims to arm you with strategies to navigate the crowded and highly contested world that many buyers are finding in their local real estate markets. It is possible to make your offer stand out in a crowd of 10, 20, sometimes even 30 other offers. In many housing markets, the days of simply writing up an offer and emailing it to the listing agent, who then gladly encourages their client to accept it, are over. More dedication and effort is often required to seal the deal. It is now necessary to romance the seller and their agent.

Knowing Your Market Matters

The hotter your market, the more you will need to get creative with your offers.

For example, Las Vegas, Henderson and Boulder City, which is my local real estate market, are currently scorching hot. Prices are up over 17 percent from where they were when the real estate market collapse was at its worst. Las Vegas, Henderson and Boulder City’s inventory levels are half of what they were a year ago, and buyer confidence is back in a big way. Interest rates are still near record lows, and there is very little new construction.

Expert Advice for Homebuyers

Updated Proof of Funds

This is a basic concept but still worth reviewing. If you are planning on being successful in today’s market, you need to be able to clearly show the seller that you are a ready, willing, and able buyer with the means to close the deal. The first step is demonstrating proof of funds in excess of the down payment and projected closing costs. This proof of funds should be a PDF file of your most recent bank statement, investment account, or other liquid cash account. Please do not send a screen shot of your computer screen. That is a big red flag to a smart listing agent because it is typical of what fraudulent individuals try and pull off.

Get a Desktop Underwriter Approval Letter

When competing against cash buyers it is important to make yourself as much of a sure thing as possible in the eyes of the seller. A way to do that is to have Desktop Underwriter (DU) approval from your lender. DU approval is more than just your typical preapproval; it must go through an industry standard underwriting program and be analyzed by a computer program along with your credit score. DU approval is an extra step that demonstrates buyers are organized, proactive, and ready to close escrow.

Realtors® sometimes do favors for their friends and write them approval letters even though their friends don’t deserve them. The DU approval process makes sure this gaming of the system doesn’t happen; it demonstrates the legitimacy of the borrower and the approval letter.

Don’t Overestimate the Power of Cash

Cash is and has always been king, but a lot of homebuyers seem to think they are the only ones that make offers with it. If you are a cash buyer, you need to realize that there are currently many other homebuyers like you; it is not rare for a property to receive multiple cash buyers. Do not expect a big cash-buyer discount or you will find yourself losing deal after deal. The privilege that cash gets you in this market is the likelihood that you will be the one a seller selects once they have narrowed the field down to two or three of the strongest buyers for any particular property.

Include a Cover Letter

Your agent should be preparing a detailed cover letter that clearly lays out the main points from your offer. You want to make it easy to be identified as a strong buyer with an organized and professional real estate agent. Your cover letter can back up your offer and assure the seller that you love the property and will close it given the chance. Also, try and make an emotional connection to the seller; you never know what will break a tie between you and another homebuyer.

Leverage Your Lender

Hopefully your agent has aligned you with an aggressive mortgage professional who understands their role in assisting you to present the offer. The lender should be calling the listing agent to make sure they received the offer, assuring the listing agent that you are solid as a buyer, and answering any questions they may have. If there are 10 offers on a particular home, your lender will make a big impression if they are the only one that follows up with the listing agent. Have your preferred lender call every listing agent that you present an offer to. You can even take the extra step of having your lender shoot a quick introductory video assuring the seller of the buyer’s qualifications and then send it to the listing agent. This can be done right from their desk using their iPhone or webcam and is quick, easy, and effective.

Hand-Deliver the Offer

The art of hand-delivering real estate offers has largely been lost. Have your buyer’s agent shock the listing agent by actually making a face-to-face visit when presenting your offer. It could be what makes you stand out from the crowd.  Remember, the seller is not only picking a buyer to work with but also a buyer’s agent. The more professional you and your agent come off the greater the chance for success.

Write a Clean Offer

This is all about focusing on the big picture. You are about to make a huge purchase. Don’t lose the deal by clouding the waters with things like home warranties or other annoying little fees for the seller to pay. Muddling the offer was acceptable in the old market, but now there are plenty of buyers that are making offers free of this sort of thing.

Follow Up

So you, your agent, and your mortgage advisor have done a great job of presenting the offer, and you are feeling good about your chances. This is no time to sit back and relax, however. Make sure that somebody from your team, typically your real estate agent, calls to follow up on the status of your offer. I prefer calls over email because a phone call shows more dedication to the deal. Again, personal touch is key.

Team Jenkins June 2013

Bouncing back from historically one of the worst housing slumps in the country's history, Nevada and Las Vegas specifically, are recovering at a fast rate. Nevada home prices are rising at a rate that is moving faster than other areas of the country, putting Nevada home prices in top ranking for highest national gains.

While Nevada home prices are on the rise, they still remain below maximum level. Economists are speculating on whether home value appreciation will continue at its current rate. Currently, cash buyers and real estate investors rule the local real estate financial sector. An average single-family home in Las Vegas currently lists for $167,000, which is up 30.6 percent from a little over a year ago. Average price for town homes and condos is up almost 42 percent, at $85,000.

In March 2013, Nevada ranked highest in the United States in appreciation reporting annual price gains of just over 22 percent- a figure that is double the 10.5 percent national increase. Higher priced homes increase the need to build more housing in order to satisfy inventory demands. Raised Nevada home prices are an indication that the economy in Las Vegas is on the mend, as home buyers are now able to afford pricier housing.

As home prices continue to rise, the economy responds by maintaining the real estate come back that pushes homebuyers to purchase property before prices surge any higher. In a sellers market, homeowners who are looking to sell their home in order to recover a profit, are more apt to jump on rising home cost trends; Nevada home price gains are positively effecting the local economic climate.

In Las Vegas, population has increased by adding close to 20,000 new residents to the local population since one year ago. As population increases, there are positive fluctuations in economic spending, with consumers making up close to 70 percent of fiscal activity.

Plans are in the works for a Lake Las Vegas highway connection to be linked up to U.S. Highway 95 in the city of Henderson, NV. The highway extension will be occurring by extending Galleria Drive into a two-lane roadway (in each direction) that will also allow for a more connected route to the Galleria at Sunset mall. Local Henderson businesses will likely benefit from this new highway extension, as it will make commuting a lot easier for local residents and visitors, alike.

Henderson City Council has allowed local city staff to decide on a contractor that will be best suited for this project. Services for the roadway construction are comprised of turning Galleria Drive into as four-lane roadway that will extend from Pabco Road to Lake Las Vegas Parkway. The Lake Las Vegas highway project will provide connected access to the U.S. 95 freeway for the communities located alongside this travel path. The areas closest to the highway extension that will be most directly effected are Lake Las Vegas, Calico Ridge, Tuscany Hills, Weston Hills and the Cadence development- still being developed. These neighborhoods are currently mostly connected to Lake Mead Parkway.

The new Lake Las Vegas highway route will allow residents to have an alternate route to and from the 95 freeway. Along with improved ease of accessibility to Lake Las Vegas, the new route allows Henderson area businesses to become more easily accessible for shopping, dining out, and exploring.

The LandWell Company that is developing Cadence, is providing funding for the Lake Las Vegas Highway project. Addition funds are being offered by the Henderson Redevelopment Agency and the Regional Transportation Commission. The city is opting to use a system for construction referred to as construction management at risk, which is an alternative to the more traditionally used dewing-bid-build system. This option allows for the contractor to also contribute to the design aspects, as well.

The luxury housing market in Las Vegas is on the rise, with homes that are being sold in the million dollar range at a significantly increased rate. 85 home sales at the million-dollar mark were made during the first quarter of 2013. This figure is up from just less than 40 home sales of million-dollar listings in the beginning of 2012.

Current market trends in Nevada for million-dollar home sales means the possibility for the current year to rank as the top year by overall volume for Nevada's luxury housing. The market is being measured from the beginning of when the local and national economy changed gears. High-end housing is considered any homes that have sold for at least $1 million in the current market.

During 2012, million-dollar home sales were registered at 194 sales. In the previous year, a little less than 200 sales of million-dollar homes were accounted for in Nevada (188 to be exact). During 2010, 252 sales of million-dollar homes were listed, and 219 in 2009. Alternately, 352 home sales for luxury housing and million-dollar homes was recorded in 2008 in Nevada- a significantly higher figure.

Overall on a national scale, just over 8,000 sales of million-dollar properties and luxury housing were recorded during the first quarter of 2013; this figure is up from 6,100 ion 2012. However, even though current luxury housing home sales are on the rise, the prices for luxury housing are still much lower then what the owners of the homes had paid.

Luxury housing in Southern Nevada is appealing to potential homebuyers as an investment tool, as well as homes that can be continually updated and improved over time. Building a dream home can still cost in the million-dollar price range, however, with the ample lot sizes of many luxury housing listings, expansion is an option to upgrade both the enjoyability of home living, as well as the overall value.

Overall in Las Vegas and Henderson, Nevada real estate, we are in what is considered an extreme seller’s market. While the real estate climate can fluctuate and change with financial and statistical trends, Las Vegas has seen a great amount of growth. 1.1 months of inventory exhibits the seller’s market data, even though the market can be different based on demand and the quantity of homes for sale in each price range.

Various regions in Las Vegas sell at varying speeds- some of these statistics can impact the value of homes for sale in Las Vegas and Henderson, Nevada. In North Las Vegas, 589 homes sold with 0.93 months of inventory, at a median sale price of $149,000. Contrastingly, homes in Boulder City, Nevada saw 43 listings sold after 1.87 months of inventory- average selling price here was $215,000. High levels of home sales in the Southeast show 7322 home sales at a median price of $200,000 after 1.16 months of inventory. These figures have drastically increased over just one period of time. Adding as much as twice the amount of active listings to the real estate pool, and cutting off months of time for inventory, the climate for home sales in the Las Vegas and Henderson, Nevada area is on the rise. Home sales have also raised by at least $20,000 in some cases.

Buyers and sellers markets vary, and inventory and depreciation and appreciation is effected, consequently. In an extreme seller’s market, 0-3 months of inventory is the norm, with very high appreciation. Extreme buyer’s markets see 12 months or more for inventory sales, with high depreciation. A balanced market generally falls somewhere in between at 6-9 months of inventory, with slight depreciation of properties.

In the current extreme seller’s market climate, zip codes in and around the Las Vegas area can give an indication to what areas are experiencing the most home sales. 89052 (Henderson, NV) has seen high numbers of home sales in May 2013, at 116 sold at a median price of $292,300. 89178 (near Enterprise, NV) came in slightly below at on average 90 home sales for 0.70 months of inventory. Prices in this area mark at $184,950. On the flip side of the scale, the 89005 zip code (Boulder City, NV) showed 23 homes sold after 1.87 months of inventory, making this area one of the most improved sections of the Las Vegas valley for homes sales in the current quarter. Overall, home sales are up significantly quarter-over-quarter from just a few months ago.