The Twin Cities’ spring market is now tipped in favor of sellers. Appropriately priced, tuned-up properties in popular locations are moving quickly with buyers lining up to compete in multiples. If you are a home buyer navigating this fast-paced seller's market, you might feel overwhelmed. With limited inventory and fierce competition, it’s easy to find yourself engaged in bidding wars ending in heartbreak. This post is for you dear buyers — with strategies, flexibility, and professional guidance you can turn the odds in your favor and secure your just-right home. 

Tip #1: Get Your Finances in Order

Before you even start your home search, it's crucial to get pre-approved for a mortgage. This not only signals to sellers that you're a serious buyer but also gives you a clear understanding of your budget and what you can afford. It also strengthens your negotiating position and also allows you to act quickly when the perfect property comes along. Keep in mind, most sellers won’t even look at offers without a lender’s pre-approval.

If you are paying in all cash, be prepared to provide proof of funds in lieu of a pre-approval. A bank statement or letter from your banker showing the full amount should suffice. If not cleared state, I always check with the seller’s agent to confirm the preferred documentation.

Do know the seller’s agent may call your lender to verify your relationship and financial position. When representing sellers, I typically reach out to lenders for this confirmation before my clients sign anything. Assume the seller’s agent will do the same.

Tip #2: Work with an Experienced Real Estate Agent

Partnering with a seasoned real estate agent is crucial in the current seller’s market. Your agent should have insider knowledge of the local market, understanding of current trends for successful offers, and negotiation skills to help you secure the best deal. Lean on their expertise to navigate the competitive landscape and present an offer with winning price and terms. 

A knowledgeable agent will also have an in-depth knowledge of contracts to help you understand the plethora of paperwork needed for a successful transaction. I always recommend reading forms before signing anything, and ask your agent when in doubt. All questions are good ones! 

Tip #3: Be Prepared to Act Fast

In a competitive market, time is of the essence. Hesitation could cost you your dream home. When you find a property that checks all the boxes, don't wait – act swiftly and decisively. Schedule a showing as soon as possible (day one on market), and if you're truly interested, submit an offer soon after, if need be. When you’re ready to act, your agent should be connecting with that seller’s agent immediately to establish a relationship, learn seller preferences and gauge any competition. In a multiple offer situation, there will typically be an offer date/time deadline of which you'll need to be aware. Communication among agents is often the only way to learn how a seller plans to proceed. But be aware, ultimately it’s the sellers’ decision and they may be pleased enough with the first offer to just sign it and move on, forgoing the opportunity to generate multiples. Either way, be ready to act when you find “the one”. 

Tip #4: Make a Strong and Compelling Offer

When competing in a seller’s market, it's essential to come in strong. Work with your agent to establish a strong offer price using comparable homes and buyer trends. Then check in with your lender to stay within your budget and confirm what they can accomplish within the offer timeline. I typically loop in my clients’ lenders early on in the process to ensure clear and quick communication in the event we need to pivot or act quickly. Also consider including terms that are favorable to the seller, such as a quick close, appraisal gap coverage or inspection contingency waiver (if you're comfortable doing so). 

A Word on Love Letters to the Seller

Buyers often ask if they should write a letter to the seller when submitting an offer. Depending on the letter content, doing so could set the seller up for a potential fair housing violation. For example, sellers could unconsciously (or consciously) choose a buyer based on race, religion, familial status, etc. So, I recommend either avoiding the letter altogether, or including only what you love about the home — no personal information or photos. Occasionally when asked, or when stated in the agent’s notes, a seller may request that buyers omit love letters. Consult with your agent before spending time composing. 

Tip #5: Stay Flexible and Keep an Open Mind

Flexibility is key in a competitive market. Be prepared to compromise on certain preferences, such as style or amenities, in order to secure a home in your desired area, for example. Also, keep an open mind during your search – you may be surprised by properties that initially fall outside your criteria but end up being the perfect fit. Finally, be realistic about price. If you continue to lose out to offers well over list price and cannot afford to compete, consider searching for less expensive homes. Give yourself some wiggle room to offer more by bidding on homes that cost less. 

Thriving in a seller's market requires a combination of preparation, strategy, and flexibility. By getting your finances in order, working with a seasoned agent, acting swiftly, making strong offers, and staying flexible, you can increase your chances of securing the perfect property despite the competition.

Heidi Swanson is a Realtor® based in St. Paul, Minnesota. She writes to inform buyers and sellers on variety of topics including market conditions, tips for selling and buying, homeownership trends, and more. Reach her at heidi@lyndenrealty.com or 651-503-1540.