The Oahu real estate market in 2021 is more competitive than ever, with nearly one in two single-family homes and one in three condos sold for above the asking price in a bidding war.
With single-family home for-sale inventory near all-time lows, if no new listings were to come on the market, the existing supply would sell out in a little over one month. If no new condos were to be listed, current supply would sell out in three months.
As we head into late spring and early summer, home prices are expected to continue their climb, pushed upward by strong buyer demand, extremely low inventory and highly competitive market conditions. Although mortgage interest rates have been ticking up, they have yet to tamp down buyer demand.
Median single-family home prices reached $950,000 in March 2021, while median condo prices reached $445,000. As rising interest rates could further impact affordability, first-time homebuyers should consider acting sooner rather than later.
With some homes getting as many as 30 to 40 offers in 2021, here are a few ways to help your offer stand out from the crowd (and hopefully get accepted!).
Serious homebuyers should be prepared with pre-approval letters and proof of cash funds to show that they can make a down payment and close. They should also have a good understanding of their budget and available financing.
Make an attractive offer
Through an experienced real estate agent, find out what the seller’s needs are, and then do your best to accommodate those needs when drafting your offer. For example, a seller may need to rent the home back for a month while they make their own move. Homebuyers who can be flexible about when they move in could have an advantage.
Write a personal letter
While most Realtors® will write cover letters to sellers on their buyer’s behalf, buyers who write their own letter to sellers sometimes luck out. For sellers who are emotionally attached to their homes, a heart-warming letter telling them who you are, and why you want their house so badly, almost always helps. In some cases, sellers have accepted lower offers from buyers with a particularly compelling story over simply the highest offer.
Add an escalation clause
If you think you’ve found “the one,” and your budget allows, you can ask for an escalation clause. Under the clause, buyers can escalate their price to a specified amount over the highest offer that is submitted.
Make a cash offer
While making an-all cash offer is not an option for most buyers, those who are able to do so—for example, a couple who has just sold their long-time family home and are looking to downsize to a condo—have a big advantage, as lending conditions won’t hinder or delay the sale.
In this market, buyers will need to be patient and persistent, but with a little planning and help of a knowledgeable agent, you can win in a competitive market.
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