In a fast-moving market where homeowners are receiving multiple offers, it’s important to work with an experienced lender to determine all your options.
The Fargo-Moorhead Area Association of Realtors recently released some statistics on our local real estate market. As of February 28, 2021, there were 1468 active listings year-to-date. In that same timeframe in 2022, active listings were at 1085 – roughly a 25% decrease. So, there’s obviously fewer homes on the market this year, which generally means greater competition as a buyer.
Likewise, the average length of time homes stayed on the market was 66 days. In 2022, it’s 48 days. That means it’s a roughly 27% shorter window in which an average home is on the market this year. That shorter window generally means there’s more urgency for offers to move quickly.
Ways to gain a competitive edge
Most non-first-time homebuyers exist in a buy/sell scenario where they are getting contingent financing – where the purchase of the new home is dependent on the sale of their current home. One option to consider that could make your offer more competitive is a bridge loan. A bridge loan is temporary financing that can be used either towards a down payment, or in some cases, the whole purchase itself. Home-sellers typically like certainty, and avoiding the question mark that comes with a contingent offer might give you a competitive edge.
In some situations, it’s also possible to get both a contingent and non-contingent pre-approval. If you’re in a competitive buying situation, your non-contingent offer might be more attractive to the seller in that it, as stated earlier, provides them with more certainty. In some cases, a seller will actually accept a lower, non-contingent offer over a higher contingent offer. It could be the difference between securing your next home or having to continue your search.
In a competitive market, it’s especially important to discuss these potential options with your banker so you give yourself as many advantages as possible. Contact your American Federal banker today for more information!
