cash offers and skipped inspections: CT real estate agents share how buyers are trying to stand out
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By Meredith Guinness, Nicole Funaro | Published on April 14, 2021
Connecticut is experiencing one of the biggest seller’s markets in its history. And the unprecedented demand is pushing prices up and inventory down.
In 2020, the U.S. Postal Service reported more than 10,000 relocations to Connecticut from New York. Given the COVID-spurred urban exodus, some communities saw double and triple-digit increases in the number of home sales last year. Additionally, realtor.com predicts the Greenwich-Bridgeport corridor will see one of the half-dozen biggest increases in home prices in the nation in 2021.
And that’s creating the perfect storm of buyer frenzy, according to local real estate watchers. Well-placed and high-priced homes are flying off the market, and bidding wars among buyers are becoming commonplace.
Cash offers
Many local realtors have stories about the New Yorkers coming into Connecticut and paying cash for homes – sometimes sight unseen. Writing a check is the easiest way to a seller’s heart because it dispenses with the haggling and delays that can come with mortgages, said Stephanie Barnes, a Westport-based realtor with Stephanie & Co. at Compass.
Waiving home inspections
While she doesn’t recommend it to her clients, Barnes said some buyers waive home inspection to streamline the process. Some reason it makes sense to take the calculated risk of an inspection “for informational purposes only” or bring a trusted contractor along on a walk-through.
Megan Foggitt, a Wallingford-based real estate agent part the CT Property Sisters associated with Margaret Bennett Realty, suggested waiving a portion of whatever repairs may be necessary. By doing this, Foggitt said buyers can state that they will not ask the home seller to cover any repairs uncovered in the inspection process unless the cost exceeds a particular figure.
Waiving mortgage contingency
Barnes said she has seen some buyers waiving the mortgage contingency that protects a buyer’s deposit if something unforeseen happens to the final sale. Without it, a seller knows that, should things fall apart, they can quickly cut loose and look for a new buyer.
Escalation clause
Realtor Eric Radecki of Century 21 in Fairfield County suggests considering an escalation clause. The buyer agrees to pay a certain price for the home. If the seller then receives a higher bid, the buyer agrees to increase by pre-discussed increments. This move gives the seller more insight into a buyer’s commitment in the event of a bidding war, Radecki said.
Pre-approval
Sellers want to know a buyer is serious, realtors said. Getting “pre-approval plus” from a mortgage lender before making an offer is wise, said Radecki. This is a pre-written mortgage agreement, not just a promise or pre-approval that is “in process,” he said.
Foggitt also mentioned that she will have the lender associated with her buyer contact the listing agent to share information on how financially well-suited their buyer is to make a home purchase to help expedite the home sale process.
Flexible closing date
Today’s market is forcing over-asking price bids. Buyers can consider sweetening the deal with a “highest price/best terms” model, Barnes said. Being flexible on the closing date or contingencies might be more attractive than a slightly higher dollar amount, she said.
In the end, every seller is different and sometimes honest, open discussion is the ticket to a winning bid.
“Every single deal is a unique organism,” Barnes said. “Even in today’s digital world, you need to pick up the telephone and talk.”